BUNGLING civil servants could have cost Worcester more than £1m after a mix-up over initials.

The Whitehall mandarins wrongly allocated cash to the city council instead of the county council as both carry the initials WCC.

The blunder could cost the Faithful City dear because the cash has already been earmarked for the £6m housing maintenance budget.

Worcester City Council's chief finance officer Grahame Lucas outlined the potential disaster in a letter to the Department of Environment, Transport and the Regions.

The council made its calculations after £1.046m for the Wyre Piddle bypass was wrongly included in its Basic Credit Approval (BCA) allocation.

The sum was in line with predictions that the council's BCA would be around £1.5m, which would have helped swell the coffers for housing repairs by £1.3m.

Instead, Mr Lucas said, the council was left with a BCA of £257,000 and warned of "severe problems" for housing.

"The city council now faces cuts in the repairs programme, and the prospect of further deterioration in stock condition and reduced investment in housing management," he added.

City council leader Robert Rowden warned: "If we don't get the money, even essential house repairs won't get done."

The county council's finance director, Mike Weaver, blamed a Whitehall clerical error for the mix-up.

"It appears someone could not distinguish between the two councils - Worcestershire County Council and Worcester City Council," he said.

"They didn't exactly say 'oops', but this was a simple clerical error by Whitehall civil servants."

Mr Weaver said he was due to write to the Government to ask it to rectify the error and did not foresee any delay to the bypass, for which the Government pledged £5.6m earlier this month.

"As far as the bypass is concerned, the Government has the funds and has misdirected that funding to another local council not responsible for building the Wyre Piddle bypass."

Worcester MP Mike Foster said the city council now had to decide whether it had enough cash after revising its calculations.

"If they are saying their borrowing limit is not enough after taking into account the error, then by all means lobby the MPs and we will look at the situation with them."

David Prior, of the DETR, was unable to explain how the mix-up occurred.

"If the council writes to us we'll see what we can do," he said.