Housing chiefs have been warned that changes in interest rates could put the transfer of the district's 25,000 council houses to community trusts in jeopardy.

Finance officers said at yesterday's executive committee that if the valuation of the properties was less than the set-up costs of the huge operation added to a special premium payment then the transfer could not go ahead.

The committee was warned the collapse of the plans would in turn mean £11 million of costs falling on the authority.

The officers urged close scrutiny of the economy and said if any increase in the valuation of the properties or decrease in set-up costs could be achieved the risk would be lessened.

A detailed report to members showed the set-up costs predicted at £6.6 million in April were now estimated at £8 million. The Council will also have to make a one-off insurance payment of around £3 million which will increase the total to £11 million.

The properties are currently valued at £69.6 million and the public works loan board is likely to ask for a premium of between £54 million and £63 million because the Council and Government will pay off its debts still owed on the houses earlier than expected.

None of the proceeds from the sale would go into the Council's coffers because of complicated financial arrangements. Officers said preparations were being made for about 900 staff to transfer to the Bradford Community Housing Trust Group which will take over the properties.

The workers are currently in departments including housing maintenance and management, tenancy enforcement and house sales.

Neighbourhood wardens, caretakers and most of the tenancy enforcement officers will transfer and staff will retain their existing terms and conditions of employment.

But leading Labour councillors claimed funds earmarked for housing services had been raided to help pay for the second biggest council house transfer in Britain.

Labour group leader, Councillor Ian Greenwood, said: "The Council has decided to take money from the housing revenue account to subsidise this. It is money which has been paid by the ratepayers and should stay where it is."

Labour members spoke out as tenants across the district complained they were left waiting for work on their homes because the repairs fund has run at least £1 million into the red.

Director of Housing Geraldine Howley said the figure was incorrect. She said a far larger number of repairs had been ordered than normal in the run up to the transfer.