Claims that a 'power to the people' housing project that is being shut down by Birmingham City Council is harbouring public cash worth #250,000 were denied by the organisation yesterday.

The city's housing boss Coun John Lines said the council was attempting to recoup the cash from the The Druids Heath Tenant Management Cooperative and has frozen its bank accounts.

However, a committee member said the accounts were still up and running and denied that the TMC had significant funds.

The TMC was formally shut down by a decision taken at a council cabinet meeting last week following allegations of mismanagement. However, the resident-led housing project is still operating until staff are transferred to the local authority.

Coun Lines (Con Bartley Green) said the council is attempting to recoup the cash following fears that the TMC might attempt to use the cash to stage a legal challenge against the closure order.

He also told The Birmingham Post that the accounts have been frozen.

However, TMC committee member Sandra Jenkinson said: "This is absolute rubbish. I do not know where Coun Lines is getting his information from."

An investigation was launched last week following allegations of mismanagement and fraud at the TMC.

It has been claimed that the organisation received a #2 million "bail out" from the authority over the last five years to cover unexpected additional management support costs.

However, Ms Jenkinson said: "I could not believe it when I heard that we were supposed to have had #2 million from the council. I have not seen any evidence of this."

Coun Lines could not be contacted yesterday.

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