CONTROVERSIAL plans to hand over control of council services to a private firm took a step closer to realisation yesterday.

But a final decision over which company will run the services has been deferred until next month.

At a cabinet meeting, Middlesbrough Borough Council members whittled down the list of four contenders for the job to a shortlist of two - Amey, and Hyder Business Services.

The decision came after Amey, Capita Business Services, Hyder and PricewaterhouseCoopers were all invited to submit bids setting out how they would improve the running of services.

Councillors opted to bring in an outside company as a strategic partner after judging that a private firm would be able to channel extra funds into the authority.

Last night, leading councillors involved in making the final decision said they were spoilt for choice.

Councillor Sylvia Connolly, the deputy leader and commissioner for resources said: "The council is in the enviable position of being able to choose between two proposals, both of which offer an opportunity to provide better services, protect existing jobs, create new employment opportunities and generate significant savings.

"The message which has come through from the careful and objective work carried out on the submissions, is that all four were of very high quality.

"We now have the opportunity, over the next few weeks, to continue intensive negotiations with the top two companies, with the clear aim of getting the best deal for the town."

The council has assured the 1,000 staff who could be affected by the transfer that, although they will no longer be classed as its employees, their terms and conditions will be preserved.

But Teresa Higgins, secretary of the Middlesbrough branch of Unison, which represents them, said many fear the change could spell disaster.

"People are worried about the future," she said.

"We are disappointed that the council has decided to use a private partner, as we believe that it should remain accountable for public services."

She said the council's consultations on the partnership had been well conducted.

"We are still in talks with the council about the transfer of workers to one of the companies. It has done its best to alleviate people's concerns," she said