UNDER-fire government contractor Liberata - which sacked 200 people in Nelson last month and left hard-up Blackburn College students needing food vouchers to survive - has lost its deal to provide educational maintenance allowances.

Thousands of students are still waiting for their allowances, two months after the start of the September term, and dozens of Pendle jobhunters were taken on to administer the scheme fron offices at Number One Market Street, Nelson.

But without any warning, and after only five weeks in post, the Nelson workforce was told by Liberata bosses that their services were no longer required.

Now it has been announced that Liberata has lost the contract.

Pendle MP Gordon Prentice, who heavily criticised the Nelson job losses, had requested a House of Commons debate on the problems.

He has now welcomed the news that Liberta had forfeited its six-year contract to administer the allowances.

He said: “This is absolutely the right decision. The horror stories I have heard from people who worked for Liberata and then were sacked after five weeks made my hair stand on end.

"Our first priority should be the 40,000 students who are still waiting for their EMA payments to come through.

“The way in which this whole thing has been handled is deplorable.”

Within the past couple of weeks Blackburn College has handed out Tesco food vouchers to students hit hard by the chaos.

Vice-principal Lisa O’Loughlin said there had been real fears that students would drop out of courses if the allowances problems continued.

Government minister Jim Knight said that by November 5, around 15,000 students were still waiting for at least one payment to be made.

But an estimated 150,000 people have been caught up in a backlog, over the £30 weekly payments.

The contract is the responsibility of the Learning and Skills Council and is worth around £1million a month to Liberata.

Council bosses in Pendle, where Liberata has a deal to perform a range of ‘back office’ functions for the local authority, complained that they had been ‘left in the dark’ over the Nelson sackings.