NORTH Lanarkshire has sought legal advice on whether it can renegotiate a housing repairs contract at the centre of a bitter Labour civil war.

The council, according to its own officers, is risking "significant operational and reputational implications" if its £30m-a-year deal with loss making Mears Scotland breaks down.

However, its ruling Labour group remains bitterly split on whether to axe the contract and re-tender - or offer new and more lucrative terms to the company, in which it has a one-third stake.

Now North Lanarkshire's administration has asked a senior advocate whether it can change terms without facing a legal challenge from other firms that initially bid for the work.

This advice will then allow councillors on its powerful policy and resources committee to decide exactly what to do with the contract.

A spokesman for North Lanarkshire Council said: "We can confirm the council has sought external legal advice and the final report to the committee is in preparation."

As The Herald has already revealed, one veteran councillor has already lost his job as the local authority's watchdog after questioning the deal with Mears Scotland, which is run by Willie Docherty, husband of Glasgow Labour Lord Provost Sadie Docherty.

Tommy Morgan was removed from his post as convener of audit and governance before Christmas after complaints from councillor leader Jim McCabe and others about him. Party colleagues, however, were dramatically split 16-14 on the vote. Mr Morgan has now referred the matter to his lawyers.

The sacking came after questioned why the contract was not terminated after officers, in documents leaked to the Herald, said they had "serious concerns about the long-term viability of the current financial model".

Mears Scotland has lost £10m over the last four years.

It is not expected to be able to deliver promised "best value efficiency savings" to the council.

In December The Herald revealed that Mr Docherty, his associate Steve Kelly and a number of other executives had joined Mears Scotland immediately after receiving substantial early retirement packages from City Building, the spin-off from Glasgow City Council's old direct labour organisation.

Before their departure Mr Docherty and Mr Kelly had come under fire for spending City Building funds to entertain senior Labour figures, including North Lanarkshire leader Jim McCabe.

Correspondence sent from Mr Morgan prior to his sacking seen by The Herald included questions about the transfer of executives from City Building to Mears Scotland.

Mr Morgan, writing to council chief executive Gavin Whitefield, asked: "Can you guarantee me that any investigation of this unusual golden handshake arrangement will not bring any criticism or reputational damage for North Lanarkshire Council?"

David Miles, the chief executive of Mears - which owns two-thirds of Mears Scotland - has stressed his firm's commitment to the joint venture and its contract and highlighted his creation of 100 jobs and 80 apprenticeships.