OXFORD City Council is to ready to spend up to £200,000 in its continued quest to become a unitary council.

The prospect of a wholesale reorganisation of local government in Oxfordshire looked remote after the Government gave councils until just January 25 to submit plans.

But the city council will attempt to meet the tight deadline by ordering an investigation into whether it is financially feasible to continue with a bid.

The Government has warned that any new unitary councils would have to deliver value for money and generate savings to local taxpayers. They would also have to be self financing, with the cost of the reorganisation recovered within five years.

The city council is preparing to take on consultants to establish the cost of creating a new unitary body and to examine if services could be provided more efficiently. These would include education and social services that would be taken over from the county council.

A report to city councillors on Monday recommends that the council gets on with preliminary work, in the hope of proceeding with a submission by the end of January.

The Liberal Democrat leader of Oxford City Council, John Goddard, pictured, said the first step was to see whether the city could meet the Government's financial criteria.

He said: "If it proves financially unfeasible we would stop it. If it looks as though we have a chance, we shall go ahead.

"Deciding whether it is possible to cover the transitional costs in a five-year period is going to require a great deal of detailed work."

Councillors will be told that a report by an academic, Prof Michael Chisholm, calculated that the transition cost could be in excess of £17m, representing up to £120 for every resident.

With no other councils in Oxfordshire interested in submitting bids, the city is also faced with producing a blue print of a reorganisation for the whole county. This would mean having to investigate such options as abolishing the county council to create two or three new unitary councils, or allowing a two-tier system to continue outside the city boundaries.

Keith Mitchell, the Tory leader of Oxfordshire County Council, said: "This seems a great deal of money for a council, constrained in its budget, to be spending.

"The city remains a weak council, with the Audit Commission report suggesting it does not offer value for money. The city will not be helped by spending £20,000 on a bid that is clearly not going to happen.

"In putting in a bid, the city would also find itself having to say what would happen to the other councils."

Craig Simmons, leader of the city's Green Party, said: "It is one of the most crucial things to face us as a council. With potential savings of £4m a year, it is worth investing a small amount of money to look at it."

With the city council now looking to employ a new interim chief executive, Mr Simmons said it would be a big advantage if the council found someone with experience in setting up a unitary council elsewhere.