TOWN Hall experts are paving the way for a major U-turn in housing policies which will see a major cut in grants to problem areas.

Housing chiefs are drawing up the strategy, which would ensure council properties will stay under town hall control, even though an independent report recommended transferring control of council properties to the private sector.

The council says it is keeping its options open but opposition groups have accused the Labour group of preparing to transfer housing stock to the private sector and of using the strategy to scare people into agreement.

The shift in policy would see more funds directed towards popular estates in Blackburn and Darwen and taken away from Roman Road and other estates.

High-profile campaigns aimed at improving standards and attracting new tenants to run-down estates would also be a thing of the past.

The report revealed £140 million needs to be spent on repairing housing in the borough and there is little chance of the council raising the cash. According to the latest figures, demand for housing is at all time low and the high number of empty properties is putting a massive financial strain on the council.

A report on the problem will be discussed by the housing and community services committee tomorrow.

The report reads: "Housing expenditure has sometimes been diverted from long-term rolling programmes to tackle problems on particular estates.

"To some extent this approach was encouraged by previous funding schemes such as Estate Action.

"In some cases Estate Action has physically turned some estates round but physical improvement of housing has not always proved to be a lasting solution.

"This council has been frequently criticised by existing tenants for appearing to invest a disproportionate amount of its resources in the worst estates."

Housing chairman Councillor Mohammed Khan said: "We are looking at a number of options but what it boils down to is supply and demand." Councillor John Williams, deputy leader of the Conservative group, has slammed the change in policy.

He said: "The bottom line is that it is no longer viable for the council to keep control of its housing stock.

"It is about time the Labour group called a halt to the lie that there is not going to be a transfer in control of housing stock to the private sector.

"The housing policies of the last 10 years have failed and the Labour group is scrabbling around for ways of clawing itself out of the hole it has got itself into."

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