Councillors agreed to submit a business case to Communities Scotland, the government agency which regulates social housing.

It outlines arrangements for staff moving to Highland Housing Association and a valuation of the housing stock.

The business case also assumes rents will be pegged to inflation-only increases for five years.

Tenants vote

Councillor Sheena Slimon, the council's housing spokesperson, said: "We know that people are concerned to keep rents affordable and the business case will allow Highland Housing Association to offer rent guarantees which the council would not be in a position to make."

A more detailed valuation of the council's housing has still to be completed and the final business case will have to be agreed by the housing and social work committee.