A CALL has been made for the district auditor to investigate a council's bid to transfer its 13,000 council houses to a newly-formed housing group.

Middlesbrough Council chief executive Brian Dinsdale recently announced there would be no consultation leading to a ballot of tenants on the transfer to the group Erimus, until the council was "completely satisfied'' that the deal would benefit the whole town - and that it would not have a negative impact on other council services.

The council is looking for help from Deputy Prime Minister John Prescott's office in resolving a "unique funding dilemma'' thrown up by the transfer idea.

It has emerged that every month of delay in the transfer timetable will cost the council £30,000 in additional fees to consultants.

The council has not set itself a timescale for completion of the transfer, but could now be given until 2005 to resolve the situation.

There are also discussions between the council and its private sector partner, HBS, which runs the council's revenue and benefits service, over the impact a transfer will have on their joint contractual agreement.

Bill Pearch, head of housing in Middlesbrough, said: "There are issues to be bottomed.

"What we have got is two Government initiatives which Middlesbrough is trying to meet - both of which have a degree of conflict.

"There is a cost in terms of not progressing at this time."

Mr Pearch said the additional costs would be "rolled up" into the cost of the transfer.

But Geoff Kerr-Morgan, spokesman for the pressure group Defend Council Houses, said: "I think the council is in a mess, having rushed into this without thinking it through.

"It's a big quagmire they have got themselves into. I would call for it to be looked at by the district auditor.''

An immediate consequence of the transfer scheme problems is that plans to replace the present housing offices with electronic delivery access points centred on libraries and leisure centres have been shelved for the time being.

Meanwhile, council tenants in Hartlepool have voted to have control of their homes handed over to a private, not-for-profit company, Housing Hartlepool.