A LABOUR councillor who applied for a £22,000 job with a race watchdog of which he was already chairman has resigned his top ranking council job over the affair.

Coun Mohammed Khan, who had already stepped down as chairman of the area's Racial Equality Council, has now resigned his post as chairman of Blackburn with Darwen Council's housing committee.

Coun Khan's deputy Coun Dave Hollings, who sat on the selection panel which offered Coun Khan the job, has also resigned over the matter.

But Liberal Democrat leader Coun Paul Browne said they should both resign as councillors too.

Coun Browne said: "This whole business stinks.

"I am relieved he has resigned as housing chairman and that is the least he should have done after this business and all the accusations that have been levelled at him."

In a statement Coun Khan said: "I now recognise that I took insufficient steps to ensure a close council colleague was not on the REC recruitment panel that interviewed me for the post.

"I understand how that must look and it could be perceived as an error of judgement on my part.

"Unfortunately people anonymously, apparently for their own sectional interests, have chosen to make outrageous and untrue statements about me. "I feel I must place on record that I will be strenuously defending myself within the REC."

Coun Khan applied for the job while he was still chairman of the REC and was offered the post by a selection panel consisting of Coun Hollings, former Labour Coun Abdul Piracha, and Labour women's officer Pat Maudsley.

Coun Hollings said: "It is important as a councillor not only to do what is right but also to be seen to do what is right.

"In not declaring an interest at the interviews I made a serious error of judgement.

"This has brought embarrassment not only to my family and myself but also to the Labour group and the council."

Coun Hollings has also resigned from the REC Executive.

Deputy leader of the Council, Gail Barton, said: "While it is regrettable that two capable and well respected members of the group have resigned their positions, the Labour group must not be distracted by questions concerning the integrity of any member of its administration.

"There is nothing to stop councillors applying for jobs such as these on bodies like the REC or the Ethnic Minorities Development Association."

Meanwhile a disciplinary hearing was opened and adjourned yesterday into the actions of REC director Abdul Hamid Chowdry during the affair.

Converted for the new archive on 14 July 2000. Some images and formatting may have been lost in the conversion.