TWO corrupt council officials and two businessmen who supplied them with cash and hospitality have been jailed with a warning they face "significant" sentences.

Former local authority employees Charles Owenson and James Costello were treated to dances and drinks in lap dancing bars as valuable Edinburgh City Council contracts were secured through bribery.

Ex-directors of Action Building Contracts Ltd (ABC Ltd) Kevin Balmer and Brendan Cantwell provided the rewards over the allocation of work for public buildings including schools, care homes and cemeteries.

Following their earlier guilty pleas a sheriff told them that he would continue their case until tomorrow for sentencing at Edinburgh Sheriff Court to consider the information he had been given.

But Sheriff Michael O'Grady QC told the four men: "Having regard to the gravity of the offences, it is clear to me the sentences will require to be custodial and require to be significant."

He remanded all of them in jail ahead of sentencing.

Owenson and Costello were provided with hospitality, including corporate seats at Hibs and Hearts football grounds and meals out as well as cash, by Edinburgh-based construction firm ABC Ltd (Action Building Contracts).

The contractors even submitted inflated invoices to the local authority for work carried out to cover the costs of the bribes they were paying council officials.

Fiscal Keith O'Mahony earlier told the court: "In essence, the council was being charged for the cost of bribing its own officials."

Invoices were found that were falsely inflated to the value of more than £67,000.

The prosecutor said the hospitality the firm provided was "extensive" and added: "Drinks and lap dances were purchased for Owenson and Costello."

The pair also had expensive cars including an Audi TT Quattro and a Mercedes ML320.

Owenson and Costello allocated work orders to the firm valued at a total of almost £1.5 million.

Owenson, 62, of Drum Brae Neuk, and Costello, 44, of Crosswood Crescent, Balerno, both Edinburgh, earlier admitted offences under the 1889 Public Bodies Corrupt Practices Act and proceeds of crime charges. Both have been dismissed.

Two former directors of ABC, which went into liquidation in 2010, Balmer, 52, of Tantallon Gardens and Cantwell, 44, of Bankton Gardens, both Livingston, West Lothian, also admitted a corruption offence. Balmer also admitted fraud.

First offenders Owenson and Costello both worked as property care services officers with the council in a department that looked after schools, care homes, community centres and cemeteries.

They were responsible with others for logging reports of properties that needed repairs and taking on contractors to carry out the work. ABC was an approved contractor and carried out the "vast majority" of the work at the time of the offences.

Police began carrying out enquiries in 2010 as a result of complaints about the statutory notices system and were later informed that senior management had received "a whistleblower letter" alleging that Owenson was showing favouritism when allocating work to contractors.

The Crown has raised proceedings to recover crime profits in the case.

Defence solicitor advocate Maurice Smyth, for Owenson, said: "He had no say as to what money he should receive or when. He didn't think he was hurting the council. He thought he was ensuring the council got the best."

Mr Smyth maintained that Owenson "was not living a life of luxury from money supplied by ABC".