Birmingham City Council last night voiced its "regrets" that thousands of employees would face pay cuts of up to £25,000 under its controversial pay and grading review.

Despite an emotional speech by Labour leader Sir Albert Bore to the full Council, calling for a 'rigorous review' of the process, the ruling Liberal Democrats and Conservative coalition won the Chamber vote.

However, that will have been of cold comfort to the dozens of demonstrators who made their feelings clear outside the Council House as yesterday's meeting got under way.

In a statement the ruling parties thanked staff for their hard work, then added that city workers who faced pay cuts would be able to appeal.

The Council voted 61 in favour, 37 against with two abstentions to an amended motion, tabled just days after the Council found itself at the centre of a bitter censorship row, as it emerged staff were banned from accessing a web-site where they could exchange information about the programme of pay cuts.

Sir Albert cited examples of some of the worst-hit staff, with one claiming to lose £25,000 under the pay review, and added that back pay owed under the new grading system "would equate to £40 million per year in increased revenue contributions from City Council staff'".

He added: "What they are reducing is the pay budget of the City Council. What they are saying is that they can't afford it.

''You can either cut the number of employ-ees or you can cut their pay, but what they're trying to do is both.''

Coun John Hemming (Lib Dem, South Yardley) said the Council had been forced to conduct the review after it had been taken to employment tribunals "because pay and grading that had developed over a number of years was unlawful''.

He added: "This is not anything anyone wanted to go through. ''It is important that staff understand we're not happy about what we have to do.

''Work with us through this process so we can improve the situation for staff generally.''