A catalogue of alleged mis-management at Oxfordshire Racial Equality Council has led to the threat of funding sanctions unless the situation rapidly improves.

OREC, which offers help and advice in racial harassment and discrimination cases, now faces the prospect of folding if Oxford city and Oxfordshire county councils withdraw funding worth a combined £50,000.

Issues have reached a head because the organisation, which employs seven staff and costs £100,000 a year to run, met just four per cent of its referral targets between April and June.

In the same period, 105 racist incidents were reported in Oxford. Oxford City Council claimed "no progress" had been made on major parts of OREC's work programme.

On Monday, city councillors sitting on the decision-making executive are to meet to decide what action to take.

The city council has highlighted the following management issues: there have been four resignations from OREC's executive board since January; numerous complaints about executive board members have been made; targets set by the Commission for Racial Equality have not been met.

OREC director Patrick Tolani said: "I have to say the matter is being resolved. It would be calamitous - it would be a quarter of our funding. It would mean the organisation would die."

The city council has suspended the organisation's next grant instalment, due to be paid on October 1, and County Hall is considering following suit.

The Town Hall is looking to see if OREC services could be provided elsewhere.

City council neighbourhood renewal manager Val Johnson said: "There have been concerns about the operation for some time now.

"From the information provided by OREC, it is clear they are not performing well."

She said from April 1 to June 25, OREC received 112 referrals, but only four were seen within the one-week target. She added: "Some initial improvements were made with the appointment of a director (Mr Tolani). These improvements were short-lived and concerns have not gone away."