EIGHT hundred and fifty council workers are facing the axe today after details of a financial crisis were announced.

Town hall bosses in Oldham stunned staff last night when a shock email was sent out detailing their cost-cutting plans.

Officials from the controlling Liberal Democrat party say that the town's finances are in a mess.

In a bid to turn things round they have opened a 90-day consultation period and called in leading accountancy firm KPMG.

Leading figures from the council met trade union representatives to inform them that almost a fifth of the council's workforce of nearly 5,000 could lose their jobs.

Workers have slammed the council and unions have pledged to support their members.

They have begun a legal process setting out the reasons behind their actions and have opened negotiations.

Council leader Howard Sykes admitted the figure was 'significant' and would concern staff.

But he added that the potential cuts were part of 'a package of options'.

He said: "The key word is potential and that is precisely what it is at this early stage of the budget planning process. The fact is that the council has to find £17.3 million of savings to balance next year's budget. Staffing costs, like those of a lot of other councils up and down the country, are a big part of our overall budget, so it is inevitable that we should explore the potential for savings in this area.

"They are part of a package of options where we are also looking to reduce the amount of accommodation. We are also looking to find other major efficiency savings to bridge the gap. The proposed savings are critical in our efforts to provide our residents with the value for money services they quite rightly expect. They will enable us to go forward with the important regeneration and renewal work of our borough".

Finance boss Lynne Thompson added: "Everything possible will be done to minimise the need for compulsory redundancies. We will be looking at voluntary options, redeployment, retraining and other measures to ease this impact. "Our staff are being kept informed of the council's proposals, including the advice support they can access."

The move has already come under fire. One furious worker, who did not wish to be named, made reference to a recent £100,000 re-branding exercise taken on by the council.

"They spend £100,000 on coming up with a new symbol that looks like a Polo mint and then hit us with this," she said.

"It's absolutely diabolical. Some of these bosses should look at their own salaries before going for anyone else's."

Phil Woolas, Labour MP for Oldham East and Saddleworth said: "I find this staggering considering Oldham council is given one of the best settlements from central government of anywhere in the country. I would urge them to look at other options such as improving their energy efficiency before resorting to such drastic measures.

"Hopefully this can be avoided but if not it's one hell of a whack for Oldham."

Mr Woolas said he was due to meet Mr Sykes and would be raising his concerns.

Leader of the opposition Labour group Jim McMahon said: "I don't see how the Liberal Democrats think they can cut 850 jobs from the town's biggest employer without thinking it will impact on the local economy. I would urge them to think about their social and moral duty to the people of Oldham."

Frank Hont, regional secretary for Unison, also slammed the plans. He said: "It's not exactly the best timing. We'll be in there making sure that we do what we can."