BUS company Blackburn Transport could be sold off by its council owners following a review of their investments.

But a trade union representing more than 150 of the 200 firm's staff today expressed concern that employee rights could be eroded if it was taken over by new owners.

The firm - which operates just under 100 buses - is one of only 14 bus companies in the country to be solely owned by a local council.

The review, the first of its kind by the council, will identify investments which it can cash in on.

It will include the authority's 16 per cent share of Blackburn Shopping Centre and ownership of land on several industrial estates dotted around the town.

But a decision to sell off its shopping centre interest would be a major surprise as it gives the council a huge bargaining chip in negotiations over town-centre regeneration.

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The council is also hoping to save £200,000 a year by reducing the number of buildings it uses.

The transfer of 500 staff to Capita - the private firm which took over many of the council's administrative services in 2001 - and their pending move into Capita's new business centre in Barbara Castle Way will leave a lot of empty space within the existing buildings. They could now be leased or sold off.

Members of the regeneration and technical overview and scrutiny committee will be told about the review at a meeting tonight.

Graham Burgess, executive director for regeneration and technical services at Blackburn with Darwen Council, said: "A review of the council's investments is pending and Blackburn Transport will be part of that.

"It is too early to make guesses as to what might happen."

Blackburn Transport was formerly run by the local authority but was privatised in 1988 to meet new Government deregulation rules. However, the new company has remained in the sole ownership of the council, which is the only shareholder.

Michael Morton, managing director of Blackburn Transport, said: "It's a standard thing which the council look at and is done on a regular basis."

But Juile Burgess, regional industrial organiser from Transport & General Workers Union, Accrington, said: "It's a concern that if a new employer takes over terms and conditions could be eroded.

"Some bus services have suffered as a result of deregulation."

Blackburn Transport has previously refused to discuss passenger numbers for commercial reasons.

But at the end of the financial year to March 2002, the company returned a pre-tax profit of £75,387. Dividends were paid out to the council of £40,000, compared to no dividend in 2001.

According to records filed at Companies House, the final profit after tax and dividends was £25,000.

But a £950,000 reserve for buying new buses has been been released on to the balance sheet which gave the company a final profit of nearer £1million -- which would make it much more attractive should it be put up for sale.

More than £700,000 was spent on new buses and CCTV cameras in that time.

Blackburn Transport has also announced it is to close its Coachlines division, which specialised in coach holidays. It has not recovered from the foot and mouth crisis of 2001, the Companies House reports revealed.

Until recently, the company had a near monopoly on bus routes in and out of Blackburn.

Then, last October, upstart firm Catchmebus.com began operating head-to-head with Blackburn Transport on several of its main routes.

Blackburn Transport now competes directly with Catchmebus.com on around a dozen routes with both firms claiming they currently have the upper hand.

Both companies are being investigated by traffic commissioner Beverley Bell, who regulates the bus industry.