THE Prime Minister yesterday said he believed his constituents made the wrong decision when they threw out proposals to privatise their council homes.

Tony Blair was quizzed in the Commons on the resounding rejection by thousands of Sedgefield Borough Council tenants of plans to transfer ownership to a non-profit organisation.

Blaydon MP David Anderson asked Mr Blair to "take back our good wishes to the good people of Sedgefield, who have had the common sense to vote to retain their council houses in-house".

But Mr Blair replied: "I think it only shows the benefits - even if I don't particularly agree with it in this case - of choice."

The council proposed transferring 9,200 homes to Sedgefield Housing, an organisation created by the council and Sunderland Housing Group.

But tenants voted no by a margin of 58 per cent to 41 per cent.

Council leader Bob Fleming said: "The council has believed from day one that such an important decision should rest with tenants, and we respect the choice they have made.

"Transfers have proved very successful in other parts of the country, and we were determined that Sedgefield Borough tenants should also have the opportunity to consider this option.

"The ballot result indicates that tenants still have a high degree of trust and confidence in the council."

Campaigners who urged tenants to resist the transfer were delighted.

Alan Walter, chairman of national campaign group Defend Council Housing, said: "This vote shows how deeply unpopular privatisation of council housing is amongst tenants."

Unison branch secretary Pat Allen, a leading figure in the Sedgefield Against Transfer campaign, said: "We're extremely happy that tenants have seen through the glossy brochures and voted to stay with the council they trust and that does a good job already.

"They will have more democratic control over their homes, fixed rents and secure tenancies."

The Government has championed similar transfers across the country as those councils that do hand over control receive extra cash to reach the 'decent home' standard by 2010.

Sedgefield Borough Council can already reach that standard but leaders believed the move would provide an extra £67m for homes and environmental improvements.