Officials and police are investigating allegations that a council-owned bungalow was used as a base for an escort and massage agency.

Parish councillors at Wendlebury, near Bicester, have complained to Cherwell District Council about activities in Meadow View, including the alleged use of a council property for running a business.

Complaints have also been passed to the police. District councillor for the village, Andrew Fulljames, who is also housing committee chairman, said: "These allegations are being investigated by our housing department. If a business was being carried on, it could be a breach of a tenancy agreement."

Wendlebury Parish Council chairman Jane Burrett said: "We wrote to Cherwell asking for clarification on whether or not a business was going on. We referred the council to a newspaper advertisement for an escort agency close to junction nine of the M40 with a Bicester telephone number. "We had also received complaints over the number of cars being parked in the vicinity."

One resident said: "Neighbours were getting frightened because cars were turning up late at night."