Housing campaigners are celebrating following the Government's decision to rethink its policy on forcing local authorities to get rid of their council homes.

Members of Defend Council Housing in Brighton and Hove said the announcement that the Government was to explore ways of investing in social housing, even if councils wanted to keep ownership of their homes, could have a direct impact in the city.

The Office of the Deputy Prime Minister had said it would only give money needed for vital improvements to council homes if authorities transferred their stock to a private company, housing association or arm's-lengthmanagement organisation.

But now it has caved in to pressure from Labour Party members at two successive conferences and set up a working group which will explore ways of directly investing over the next 18 months.

Brighton and Hove City Council voted last July to transfer ownership and management of its homes to a new housing association.

Tenants are to be balloted later this year and the council is trying to persuade them to vote yes because it is currently the only way that vital funds will be secured.

But Ruth Arundell, chairwoman of Brighton and Hove Defend Council Housing, said it would now have a tough job.

She said: "We are really optimistic now that we will get direct investment in council homes and I can't see tenants voting yes while all this is going on. "Once they vote yes there is no going back."