FRESH talks are taking place over the possibility of a formal link-up between Burnley and Pendle council - as both authorities are asked to make major budget savings.

Local government officials in Whitehall rejected proposals for a unitary authority, looking after the affairs of both boroughs, earlier this year.

But discussions have now restarted over the possibility of each council providing more cost-effective services for each other.

Opposition councillors at Burnley, including the British National Party's Sharon Wilkinson, accused the authority's leadership of promoting a unitary authority "through the back door".

Burnley council leader Gordon Birtwistle said: "I just wish we could but I am afraid we cannot.

"Because of our budgetary constraints, we are going to have to save £1million and we are looking at ways of protecting services for the people of this borough.

"But we are having to do this with less money."

"We are in the preliminary stages to see if we can take some services from Pendle, and do them cheaper, and vice versa.

"This is at officer level at present and any decisions will be brought back to this council for any decisions which need to be made," he told a meeting of Burnley's full council.

Supporters of a merged Burnley and Pendle council claimed it would save between £2million and £9million, which could be reinvested in local services.

The councils produced a joint prospectus, Reaching for New Heights, which envisaged a newly-merged East Lancashire authority by 2009.

But the Department for Communities and Local Government dismissed the bid in March.

Following that Burnley MP Kitty Ussher has pressed ministers to review the proposed merger afresh, amid fears that it had been unfairy rejected over concerns about services delivery.

Rossendale council has so far resisted any attempts to change the status quo and Ribble Valley is also sticking with the current two-tier system, as is Hyndburn, which abandoned its attempts at becoming a unitary council.