A controversial plan to spend at least £200,000 redecorating the Middlesbrough mayor's parlour should go ahead, councillors agreed last night.

The money, enough to buy a small street elsewhere in the town, will be spent on the revamp of the suite in the Town Hall.

The decision has already been severely criticised by the public sector union Unison, which represented 150 Middlesbrough Borough Council workers who lost their jobs when the authority cut staff last year because of budgetary problems.

David Murray, a regional officer for the union, said: "I have no objection to civic leaders having comfortable accommodation, but this sort of expenditure is at odds with the ruthless steps taken to balance the council's books."

Part of the cash to pay for the refurbishment will come from the sale of the council's lease interests in an indoor market, now scheduled for the axe. Angry traders whose livelihoods are threatened also condemned the decision.

Haberdasher George Davis, spokesman for the 28 stallholders at the Hill Street Centre, said: "It's nice they look after their own interests, but not other people's.

"They certainly did not listen to what people were telling them. We collected 6,000 signatures on a petition in two days - people who want the market and the small shops."

But the authority last night defended the decision, saying the work planned included rewiring and removing a suspended ceiling in the Grade II listed building.

John Foster, the council's chief executive, urged members of the council's Cabinet meeting yesterday: "We have to be prepared to be bigger than petty, small mindedness which often pervades these discussions."

After the meeting, he added that there was no correlation between the threat to the market traders' jobs and the investment spent on refurbishing the three rooms of the mayor's suite, its approach corridors, staircase and entrance.

An officer's report says the civic suite's decor, fixtures, fittings and electrical wiring are "in need of urgent attention".

The refurbishment, it says, "will bring the mayor's suite up to the standard befitting the age and importance of the town hall and in keeping with the sense of civic dignity and pride inherent in the tradition of the mayoral role and function."

A firm of interior designers has been advising on the work, which it estimates will cost £200,000.

The facelift is likely to be the first phase of a multi-million pound rolling programme of improvements to overhaul the entire building.

A report on the overall condition of the town hall will be presented to the council next year.

Mr Foster said: "I think it is now time for Middlesbrough to recognise the town hall needs a significant restoration, and I understand that is going to cost money."

Former Mayor Coun Oliver Johnson said: "As an ex-mayor, I was quite ashamed to bring people into the civic suite. You could see them looking around as if to say, is this it?"

Another veteran Middlesbrough councillor, John Jones, said: "We have got to do something. There is nothing at all to be apologetic about."