COUNCIL chiefs in East Lancashire have been left in limbo over a possible share of millions of pounds of Euro cash after a bitter Cabinet split.

And some areas of East Lancs could be gazumped by other North West boroughs which were not on the list, who have started a frantic lobbying campaign to convince the Government they have just as good a case for cash.

The Government had been intending to reveal the areas eligible for Social Fund and related grants from the European Commission under the Objective Two scheme last week.

But a disagreement between Deputy Prime Minister John Prescott and Trade and Industry Secretary Stephen Byers, over how the list of eligible areas should be drawn up and which areas should be included, has delayed the announcement, probably until September.

The proposals had been due to go to a Cabinet Committee todayy before the depth of the split and objections to the draft proposals from the European Commission on Brussels caused the discussion to be postponed.

A leaked list drawn up by Mr Byers' Department of Trade and Industry includes the entire Boroughs of Blackburn with Darwen and Ribble Valley, but not Preston - where councillors thought they had a good case for cash.

Mr Prescott is keen to see the Objective Two list drawn up like the recent Assisted Areas Map on a ward by ward basis to focus help on the areas most in need. He also objects to some of the areas chosen by the Department of Environment Transport and the Regions. Mr Byers is arguing that because Objective Two deals with cash aimed at the wider impact of unemployment, industrial decline and social deprivation, the boundaries of eligible areas have to be drawn wider.

With millions of pounds in grants at stake, the bitter Cabinet dispute meant that the announcement had to be shelved as officials try to narrow the gap. If necessary, 10 Downing Street may be called in to settle the row.

But the impasse means that areas such as Preston, which missed out on Mr Byers' list, can now put pressure on to be included in September, which may mean that other areas originally on the list could miss out.

Both Lancashire County Council and Preston Borough Council have already indicated they will be pressing the Government for deprived wards of the town to be included.

Coun Gail Barton, deputy leader of Blackburn with Darwen Council, said East Lancashire had presented a good case to be awarded money and councils could only wait and see now whether they would be ultimately successful.

Concerns from Brussels about how the map was being drawn up added to the decision to postpone.

The Government reshuffle - which moved key players in both departments - also added to the confusion and delay.

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