Whatever happens, neither the council nor the partnership wants to see any forced integration in housing

Strategic partnership report

Opposition leader, David Jones, said a further �9m a year would be needed to address the problems of "unfair funding" in Oldham's health services - where mortality rates were "among the worst in the country".

Last year's report by civil servant David Ritchie recommended a racially-mixed scheme of private and socially-rented housing.

A 106-page interim report published by a partnership of Oldham Council, Greater Manchester Police and Greater Manchester Police Authority on Thursday said it "welcomed" the recommendations.

'No engineering'

But the partnership said integration could only be achieved if the people of Oldham wanted it: "Whatever happens, neither the council nor the partnership wants to see any forced integration in housing.

Running battles were fought on the streets

"There will be no artificial engineering."

Three days of running battles between white and Asian youths brought the focus of the world's media to Oldham in May 2001 after racial tensions flared.

Afterwards Mr Ritchie highlighted a system of separate development within Oldham.

Mr Ritchie said: "Segregation, albeit self-segregation, is an unacceptable basis for a harmonious community and it will lead to more serious problems if it is not tackled."

Oldham lacked "strategic direction and vision" even though the council had been effective at bidding for special initiatives.

But the council claimed that, in the past, the town had suffered through being forced to apply for funding for "narrow geographical" areas.

Full fluency

New regeneration funding, which would be carried out by a new company would need to be borough-wide.

"Unlike the Oldham Independent Review which wanted a regeneration company to focus on a limited part of the borough... [the council and the Local Strategic Partnership] believe the regeneration company must cover the whole borough to create opportunities for all of us," the partnership said.

"Anything less would be divisive."

Plans for three of the town's faith schools to open up a fifth of their places to pupils of non-Christian backgrounds are being investigated, but council leaders said they were powerless to insist on such a plan.

The partnership also said full fluency in English was essential, and that action was being taken by the police to recruit staff from minority backgrounds.

Mr Knowles said: "Today marks the start of Oldhamers fighting back."