CIVIC leaders have vowed to fight "foolish" Government guidelines that could force the council to sell off its housing stock - or land taxpayers with a £425,000 bill.

Angry Pendle councillors claim they are being bullied into changing a winning formula as the authority is regarded as one of the best landlords in the country.

Tenants will have to choose whether their council houses should be sold off to a new landlord, likely to be a housing association, after a members' vote.

But the councillors are angry as Government rules will penalise the authority if it stays as the landlord.

Lord Tony Greaves, a Liberal Democrat councillor for Waterside, said: "This council is being bribed and blackmailed into doing something which isn't right for the borough."

Tenants will have to go to the polls to decide if a registered social landlord should have control over their homes.

If tenants vote 'no' and choose to stay with Pendle Council, the authority will have to pay for staging the ballot - an estimated £425,000.

The council will also be unable to claim Government funds to improve housing.

But if a new housing association takes on Pendle's housing stock it will be allowed to borrow funds to bring the council's 3,700 houses up to the Decent Homes Standard, which would otherwise cost £15million over the next 10 years.

If tenants vote 'yes' to form a housing association, the Government will also pay the £1.5million cost of setting up the transfer - including the £425,000 ballot cost.

John Sharp, chief executive of East Lancashire Housing Association and vice-chairman of the National Federation of Residential Landlords, said: "Pendle Council is a very good landlord. It would be tragedy if the authority was to lose control of its housing stock.

"They are in a no-win situation because if they say no to the Government proposals they will end up being starved of funds leading to their housing stock deteriorating unless it's subsidised by the rate payers. It's completely unfair."

Coun Greaves added: "I understand the views of people who say the council has no other choice than to go along with it but that's not true.

"Very few people in this council and in Pendle would want this council to get rid of its council houses. Since 1980 this council has been a good landlord. I do not believe a housing association is going to be better.

"If we don't want to do it then we don't have to. We have a third option to stop it. I hope the tenants stop it and if they ask for my advice I shall advise them to vote no."