The report said the transfers will mean �3.2bn funding over 30 years

Since 1998, more than 100,000 council homes have been transferred from council control to not-for-profit bodies, such as housing associations.

Audit Scotland said the handover had brought more investment, tenant control and was keeping rent rises down.

But housing charity Shelter Scotland said the report had not considered the interests of future tenants.

Audit Scotland studied eight whole or partial transfers, including Glasgow, the Borders, Dumfries and Galloway, the Ardler district of Dundee, and the Edinburgh plan, which council tenants rejected.

The report highlights areas for improvement Malcolm Chisholm MSP Communities Minister

The biggest and most controversial transfer was in Glasgow.

The Audit Scotland report said the process did not run smoothly in the early days as the Scottish Executive and councils had underestimated the work involved.

There were no pilot projects to help with the planning of the first transfers, which included Glasgow, the area with the biggest challenges.

The executive did not control the total cost of the Glasgow transfer using "clearly defined gateways with financial limits", according to the report.

It also claimed that decisions about the early transfers were made on the basis of limited information about where investment was most needed nationally.

The report said the management of transfers was improving, but that better measures were needed to assess impact and value for money.

Mr Black said Scotland's council housing needed a lot of investment

The report claimed that the seven completed transfers would result in �3.2bn of investment over the next 30 years.

Annual rent rises would be kept to one per cent or less, compared with average rises of three per cent under council ownership, it said.

Auditor General Robert Black said: "Council housing in Scotland needs a lot of money to bring it to a decent standard.

"Paying off historic housing debt during transfers is freeing landlords to invest in improving properties, which is a significant benefit for tenants.

"By giving tenants more control and responsibility for housing management, transfers should also support better housing management."

Isabelle Lowe, deputy chair of the Accounts Commission, said: "Looking ahead, the challenge for councils is to take action to achieve the new national standards for decent homes for their tenants."

'Valuable lessons'

Communities Minister Malcolm Chisholm said the transfer had been a resounding success story for Scotland.

"The report highlights areas for improvement but also acknowledges that we have already learned valuable lessons to build significant strengths into the present system through our new guidance," he said.

But housing charity Shelter said the report had not looked at some of the policy's important consequences.

"As well as improving the homes of today's tenants, the policy also had to promote the interests of future tenants," said Gavin Corbett, Shelter Scotland's policy manager.

"That's about ensuring that new homes are built and it's about making sure that new bodies which take over council housing are able to help the council provide homes for homeless people.

"It's disappointing that the Audit Scotland report does not consider these issues and that in itself might lead to further neglect."