THE transfer of Burnley Council's houses to a publicly-run housing company is under threat despite a 90 per cent 'yes' vote by the tenants.

Spending on the move has been stopped until written confirmation is received that the Government will make up the £20million gap between the value of the estates and the amount needed to pay off the council's mortgage liabilities.

Council officials are becoming concerned by the delay and if the Government fails to deliver the goods the transfer will not go ahead.

Burnley MP Peter Pike today warned that he would make a Commons protest if the Government failed to bail out the scheme.

A £1,139,000 bill to cover council spending on the transfer would have to be met by council tax payers, the equivalent of £44.69 for every Band D property in Burnley.

The cost of the aborted deal would also fall on council tenants through a rent increase.

Council leader Stuart Caddy said: "While we are anxious to continue the transfer early in 2000, the council has a responsibility not to commit any further external funding expenditure until firm written commitment on the residual debt issue is received from the Government.

"The information given to tenants prior to the ballot indicated that the transfer would be subject to a satisfactory resolution of this issue.''

Burnley MP Peter Pike has been asked to arrange an urgent meeting between government ministers, councillors and representatives of the housing company to get clarification of the Government's proposals for resolving the residual debt problem. Coun Caddy added: "I would like to reassure all residents of the borough that the council has considered the financial risks involved if we were to go ahead and continue with the transfer process.

"While it is not prepared to authorise any further external expenditure the council remains fully committed to the transfer of its housing stock and council staff are continuing to work on the transfer."

If the transfer is completed the majority of the costs involved in the transaction will be covered.

Mr Pike said today that there was little chance that he would be able to arrange the meeting with ministers.

He said: "If the Government does let the council down I shall seek a debate about it in the House of Commons.

"I believe the government will come forward with an acceptable solution and I am still pursuing the matter.

"I have been verbally assured by ministers that this will be the case."

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