BURY Racial Equality Council is on the brink of extinction after town hall councillors refused to bail it out of a financial crisis.

The REC appealed for help when the national body, the Commission for Racial Equality, withdrew its annual £30,000 funding saying that the Bury organisation had not met certain criteria.

Now grants worth hundreds of thousands of pounds to tackle discrimination and harassment are at risk.

The REC has just secured external funding from the Community Fund (£260,000 for a three-year project to advise on immigration, racial discrimination and racial harassment); Comic Relief (£90,000 for a three-year racial harassment project); and £94,000 from the Primary Care Trust for a two-year health project.

But it says it will have to cancel these projects -- staff need to be appointed by mid-August -- if its basic long-term funding is not guaranteed. Bury Council currently puts in around £25,000 annually and has advanced next quarter's money to help out, but members at Wednesday's executive were not prepared to meet the entire shortfall. This is partly to pay salaries, including that of REC chief executive Ms Monaza Luqman: the REC says the outside grants depend on her staying to manage the new projects.

Coun Wayne Campbell said the council was not in a position to help. "We have had to reduce the money going to some large voluntary organisations like the CVS, Bury Law Centre and the CAB because we did not have it. To fund another group fully, we would have to re-visit every group we have turned down for additional funding.

"The vast majority of these groups live from month-to-month to keep going. It's a fact of life and it's a shame, and we have to look at this over the next 12 months."

But Coun Roy Walker, Tory leader, voted against the refusal. "I oppose the BNP but they are becoming a strong force," he said. "I am ashamed they got over 800 votes in my ward. With issues like asylum seekers, friction over Iraq, and other problems to do with race and culture, it seems a tactless time for the Government to completely withdraw grants from RECs. We should do more than just acquiesce without much of a fight. We could find at least some of the £30,000, if not all of it."

Council leader John Byrne said that Bury could not be expected to pick up the tab. However, he promised to ask the borough's MPs for help, and to raise the matter today (Friday July 2) with the leaders of the other Greater Manchester councils. The news was greeted with dismay by Sam Cohen, REC secretary and recently re-elected as a councillor. "We can't really blame the council because it was the CRE that withdrew the funding: not just in Bury but around the country," he said. "It's a nonsense about not meeting the criteria -- not everybody could be guilty of not meeting it. What goes against the grain is that they didn't tell us until May 7, five weeks into the new financial year when we were committed to expenditure.

"The only thing that will help is money -- moral support will not pay the bills, and we will probably have to close the doors. If the council wants to take on some of the duties, I think it would cost them three times as much, and they won't have volunteers coming in to help."

Coun Cohen added: "Race relations in Bury have always been good, and we haven't had problems like Oldham, Burnley or Bradford. The REC has been a good conduit between the council, the police and the community, but once it's lost it will never come back."