UNCERTAINTY surrounds the future of more than 2,700 elderly care home residents caught up in a funding row.

Private home owners are in dispute with Durham County Council over the fees they are paid to look after elderly people. They have rejected the council's offer of a 1.8 per cent increase in fees.

The owners allege that the council has squandered up to £50m of public money in the past eight years because of excessively high wages paid to staff - a claim rejected by the authority.

The owners say they do not wish to worry the elderly, but there are fears the dispute could hit residents.

County Durham Care Homes Association, which represents care home owners responsible for 2,700 beds, is calling for an increase in beds. Spokesman Jim McGeorge said: "The 1.8 per cent offered by the council was insulting and totally unacceptable."

Mr McGeorge said the offer amounted to an extra £4 per resident per week, compared with the extra £40 per resident per week paid by the council to its own care homes. This was against a background of rising costs and reducing fee levels, he said.

A county council spokesman denied that public funds were being misused, and pointed to the 1999 Government Charter Mark for excellence in residential care awarded to the council.

He said: "The county council is sympathetic to the financial pressures that the home owners are facing, but we, too, are facing very stringent financial controls, as a result of which we are unable to meet the demands they are making."

But for the home owners to "jeopardise the continuity of care of the most vulnerable people in the community in the way it implies is regrettable," said the spokesman.