COUNCIL chiefs in Worcester are on the verge of selling two pieces of public land at a 'discounted rate' for social housing, it has emerged.

Worcester City Council wants to flog two parcels of land to a developer in a deal to create 45 properties.

Waterloo Housing Group, based in Birmingham, will revamp unused sites at Ambrose Close in St John's and Tintern Avenue, at Astwood Cemetery under the deal.

But the move, which is set to be voted on at full council next Thursday, has sparked a dispute between Labour and the Conservatives.

The Labour administration wants to partly compensate the authority for selling off the sites at a discount by raiding £350,00 from an affordable homes kitty.

The sum will be taken from one council pot, called the 'New Homes Bonus Affordable Housing Allocation', and be put into a separate fund which the cabinet can earmark towards any priority areas.

Councillor Marc Bayliss, who leads the opposition Tory group, has accused Labour of "spending like drunken sailors".

The group is not against the housing schemes, but is asking questions about the leadership's £350,000 accounting move.

"They talk about trying to create more affordable housing but they are raiding a fund which is designed to help create just that," he said.

"It's deeply ironic given what they said when in opposition, how can Labour say they are great champions of it?"

But Labour Councillor Adrian Gregson, the leader, said: "Putting that money in the general fund allows us more flexibility over what we can do with it.

"It's not a question of raiding one fund for another, it's about prudent financial management."

The deal with Waterloo is thought to be a good one for the council, which has been battling with the pressures of having more than 2,000 people on its social housing waiting list.

The Labour cabinet sat in private to endorse the strategy earlier this month, but it will still require a behind-closed-doors vote at full council next week.

Both schemes were awarded planning permission back in March this year, with the land at Ambrose Close in St John's due to take 26 homes of various sizes and 12 flats.

A portion of land off Tintern Avenue, unused and within the boundaries of Astwood Cemetery, will accommodate three bungalows and four two-bed homes.

As well as social housing, Waterloo wants to earmark some as 'intermediate' properties for key workers like social workers and nurses.