HYNDBURN Council has appealed against its annual inspection results - prompting fears it has been downgraded in the wake of its £1.8million cash crisis.

Today council leader Peter Britcliffe said he was unable to reveal the decision he is appealing against - but insisted residents had nothing to fear.

The authority is the only one in East Lancashire still to have its Audit Commission report for last year revealed. The assessment looks at all areas of a council's performance and rates them as either excellent, good, fair, weak or poor.

But although Coun Britcliffe insisted the Commission's rating would not be a bad one, an opposition leader claimed Hyndburn had been downgraded.

Tory leader Coun Britcliffe said: "I am not anticipating that we will be judged to be a poor performing council and I am relatively confident of being judged a good one."

Last year Hyndburn Council published its Best Value Performance Plan, a Government requirement which sets out the authority's plans for the coming year.

In the report the council said residents of the borough would be told in January the results of the Audit Commission's inspection. The report also said it expected to be rated as "good".

The announcement was delayed until a separate full investigation into the council's £1.8million budget deficit was finished and has been delayed again by an appeal against the findings.

Opposition leader Jean Battle said the council had originally been judged good but then downgraded to fair after the full extent of the budget deficit was revealed to inspectors.

Coun Battle accused Coun Britcliffe of "scaremongering" voters over the financial problems.

She added: "I am a little annoyed because the Audit Commission judged the council to be good, they found out about the finance problems and then said we were only fair."

An Audit Commission spokesman said it was unable to comment until the appeal had been settled.