TAXI drivers in Pendle are preparing to strike following claims the borough council has been illegally making a profit from licence fees.

Chairman of Pendle Taxis Association Mohammed Akram used the Freedom of Information Act 2003 to get copies of Pendle Council's accounts and found the council made £14,511 from taxi licensing last year.

Government guidelines state councils should only cover their costs and now Mr Akram is going to report Pendle Council to the Local Government Ombudsman.

But the council's head of legal services Richard Townson said the extra cash was a one-off and he would explain everything to the leaders of the Pendle Taxi Association at a crunch meeting tomorrow.

More than 400 cabbies are threatening to strike over August Bank Holiday weekend in protest at Pendle Council's plans to raise their fees by five per cent.

Their action could leave thousands of people expected in Colne for the Great British Rhythm and Blues Festival stranded.

Mr Akram said: "We have been cheated and we are very angry. They have decided on a five per cent increase and they have made a profit of £14,511. It's unjustified."

President of Pendle Taxis Association Mohammed Saeed said: "We are being ignored. We want a complete review of the taxi system. We want to start everything from scratch.

"We can sit here for hour after hour and no jobs will turn up. There are too many taxis and not enough work and now they want another five per cent, they are already making a profit."

Mushtaq Ahmed, who represents Hackney carriage drivers, said: "We don't want this strike, we can't afford it but we have no choice."

A Department of Transport spokesman confirmed councils should not profit from taxi licensing.

She said: "The money the council charges should only cover the cost. Local authorities have legislation to follow.

"If anybody deems them to not be following that legislation or regulation they have recourse to go to the Local Government Ombudsman."

Mr Townson said: "What happened in that particular year is a much larger number of applications for licences than we anticipated.

"When setting the figures at the beginning of the financial year we estimate how much income we are likely to get.

"It's been fairly standard the last five years but in 2004/05 we got a lot more applications than we anticipated.

"That would suggest people out there think there is a demand for the taxi business.

"The purpose of the meeting is to take the association representatives through the figures."