Councillors have demanded an investigation into why millions of pounds from Oxfordshire County Council's pension fund is invested in tobacco firms.

Their calls have been backed by the public service workers union, Unison, which claims it is hypocritical for an authority offering care services and banning smokers from its buildings to make money from cigarette makers.

But supporters say it is vital that the fund gets the best possible returns to save taxpayers' money.

Contributions to the £628m fund, an estimated 39 per cent of which is investested in equities, are made by staff at the county council, district councils and Oxford Brookes University.

Labour councillor Brian Hodgson raised concerns at a pension fund committee meeting, but members voted against his proposals for a report into the investments.

Mr Hodgson believes £8.6m -- 3.5 per cent of the council's equity investments -- was invested in British American Tobacco, which makes about 777 billion cigarettes a year. Another £8.9m was ploughed into Imperial Tobacco, he claimed.

The council has not confirmed these figures.

Mr Hodgson said: "I think the point is that on the pension fund committee agenda there is a title about 'socially responsible investment'.

"I think it's socially irresponsible to invest in cigarette companies. I was surprised members voted down my proposals for a report -- I wasn't asking for a ban."

Mr Hodgson said investing in tobacco firms not only gave a bad example, but could be an unsound investment, because of multi-million pound compensation claims and a reduction in smoking.

But councillor Charles Shouler, chairman of the pension funds committee, said: "At the moment, county council staff put in six per cent of their pensionable salaries, and, as an employer, Oxfordshire County Council will be putting in 15 per cent during 2004 to 2005.

"I'm sure taxpayers would be interested to know that, and that if there was a shortfall, we would have to increase our contributions, which they would pay.

"It's our duty to get the best possible return on the investments.

"This is a personal crusade by Cllr Hodgson. What will be his next particular crusade? Will he want to ban companies which make armaments or alcohol?"

Tell us what you think.