The Audit Commission plans to monitor Rossendale Council and has postponed plans to call in the Secretary of State.

But it has warned that situation could change if sufficient improvements are not made.

The commission had condemned the council as providing "unacceptably poor services at a high cost".

We are working hard to make sufficient changes

Councillor Graham Pearson Rossendale Council leader

The commission's report, due to be published on Thursday, says the crisis was "due to poor political leadership and the failure of senior management to tackle problems over a number of years."

Problems highlighted at the council include poor performance on housing repairs, no strategy to tackle poor leisure facilities, and a backlog of work on revenues and housing benefit.

Councillor Graham Pearson, leader of Rossendale Council, said: "We are very pleased that the council have not been referred to the Secretary of State and are working hard to make sufficient changes.

"To take control away from the members would have been a bad step for Rossendale, and local government."

'Very serious'

The commission will now monitor the council's progress.

Paul Kirkby, Director of Inspection at the commission, said: "The failure we have found at Rossendale is very serious.

"Local people are not getting the level of service they are entitled to, and many areas of the council are not well managed.

"However, the council has said that it is willing to address these failings and it has begun to put some positive steps in place that, if carried out effectively, will make a significant difference."