NEGOTIATIONS are continuing at Cleveland's most marginal council a week after Labour lost overall control.

Party leaders at Redcar and Cleveland Borough Council have met twice this week in an attempt to form a ruling coalition.

It has been a week of high drama since Labour lost its slender majority at the council elections.

Some leading councillors have suggested that an anti-Labour coalition of Liberal Democrats, Conservatives and Independents will be the most likely outcome of on-going talks.

Since the elections eight Independent councillors have united to form the East Cleveland, Eston and Marske Independents.

Their leader is veteran Coun Steve Kay and the new Eston councillor, Ann Higgins, has been appointed deputy leader.

The other big news has been the appointment of George Dunning as leader of the Labour Group. Coun Dunning replaces former council leader David Walsh who was beaten in the previously safe Labour ward of Eston.

Coun Keith Pudney was elected as Labour's deputy. The favourite candidate for leader, Dave McLuckie, missed both appointments.

After Labour appointed its new leader the four party heads, including Liberal Democrat leader Chris Abbott and Conservative leader Vera Moody, met this week to discuss the possibility of forming an all-party executive. At one point the Labour delegation was excluded from the discussions.

However the state of the parties means there is likely to be a lot of hard bargaining ahead before any final coalition is formed.

It will take 30 councillors to form a majority. Labour has 23 seats, Liberal Democrats 15, Conservatives 13 and Independents eight.

The election result represented a fall in support for Labour which won 48 seats in 1995.

Coun Dunning said: "I would say the door is still slightly open with other parties. I think the priority for all us has to be saving steel making in east Cleveland."

Coun Moody said the Conservatives were looking at all options.

Coun Kay said the Independents would strive to bring stability to the council and Liberal Democrat leader Coun Abbott said he would continue a dialogue with other parties.

It is expected that a coalition will have been formed before the council's annual meeting on Tuesday.