A COUNCIL'S ruling Labour group has agreed to amend a controversial deal with a firm run by a friend of its leader.

Councillors in North Lanarkshire voted by a wide margin to allow Mears Scotland - run by Willie Docherty, husband of Glasgow's Lord Provost - to forgo millions of pounds in savings on a £30 million-a-year housing repairs contract.

The group's decision, almost certainly to be followed formally by the council's most powerful committee, came after their leader, Jim McCabe, admitted he was a friend of Mr Docherty and another Mears executive.

However, Mr McCabe has insisted that he would not allow his friendship with the men to colour his views of the contract now at the centre of a bitter party civil war.

One source said: "The Labour group has backed changes to the Mears contract with just a handful of councillors opposing."

An official spokesman for North Lanarkshire Council said: "A further report regarding the Mears contract will be considered by the council in due course."

Several prominent Labour figures in Lanarkshire - where the party is at risk of losing some or even all of its Westminster seats for the first time in decades - are worried that the deal will hurt them in May's general election.

Mears Scotland was supposed to provide "best-value efficiency savings" or BVES running well in to the millions, including nearly £1m in 2015-2016. This money will now have to be paid by council tenants, most of whom are on benefits.

One critic, who asked not to be named, said: "The council and Mr McCabe are being cavalier with the housing revenue account because they know George Osborne will pick up the tab. But this is public money."

Veteran Labour councillor Tommy Morgan lost his job as the local authority's watchdog after questioning the deal. Absent from the group meeting that backed the contract, Mr Morgan is now understood to be considering legal action against the party.

His enemies say he was removed as convener of audit and governance after using industrial language to Mr McCabe.

The council leader insisted he had been happy with Mr Morgan's work as watchdog and had been unaware that the Plains-based councillor had been quizzing officials over the Mears deal.

Mr McCabe has acknowledged a friendship with Mr Docherty with whom he said he had spent time on a number of holidays to Ireland.

Mr McCabe also said he was a friend of Mears executive Steve Kelly, from whom he bought his current car.

The veteran leader, however, added: "Let me tell you this: I don't care who it is - Willie Docherty or anybody else.

"If the service to my people is not what it should be, then I will deal with them.

"Friendship means nothing if the people are not getting served."

Mr McCabe, speaking shortly before the Labour group vote, also defended the Mears contract as "delivering the best service we have ever had in my time in North Lanarkshire".

He added: "That Mears cannot continue to lose money is a fact of life.

"The choice is we either stay with Mears with a reduction in the BVES or take a chance and go out to tender."

The latter option, he said, "would cost more at the end of the day; that is not just my opinion that is the advice of experts in the field".

Mr McCabe stressed that any Labour decision would be "collective, based on collective responsibility".