Council housing in Wrexham will stay with the authority

Rents have already risen by five per cent but the council is still faced with a deficit for the coming year.

Twenty five jobs could also be lost.

Council house tenants voted against transferring ownership of the town's 13,000 council homes to a housing association last month.

The agency-filled positions are expected to save the housing department �350,000 if the job cuts go ahead.

Because of a 'no' vote we'll be charging tenants more for a worse service Cllr Alun Jenkins

Wrexham council leader Shan Wilkinson said she has spoken to chancellor Gordon Brown about the housing deficit and had meetings with members of the Welsh assembly but there is no extra money available.

"I've spoken to Assembly officials and there isn't an alternative," she said.

Fifty eight per cent of the 9,722 tenants who voted on the stock transfer issue did not want to hand over ownership to a newly-created independent housing association.

The decision leaves the local authority with a �274m headache - the amount it needs to find to improve its housing stock by 2012.

The Welsh Assembly Government has told all Welsh local authorities that council housing must be brought up to the Welsh Housing Quality Standard by 2012.

Shan Wilkinson: There are difficult decisions to make

Transferring the council's housing stock to an independent body offered the authority a way out of its current financial crisis but it was not the cause of the problem.

The high level of council house sales and historically low rents have also led to the current financial situation.

"Because of a no vote we'll be charging tenants more for a worse service," said deputy council leader Alun Jenkins.

Members of Wrexham council's executive board will meet on Tuesday to discuss the housing budget.

If they vote in favour of rent increases, tenants will be paying an extra eight per cent for their homes than previous years.

"The executive board has to make a decision," she said.

Other cuts which could be considered in the long term include closing estate offices, charging tenants for grass and hedge cutting or doing away with the service altogether.