Thousands of families were devastated today after being told a multi-million pound bid to breathe new life into their run-down homes had been rejected.

Bradford Council's failure to be picked as a 'pathfinder' in a Government housing initiative means the families will continue to live in damp, cold houses, with rotting windows and other major problems.

Today affected families described it as a 'kick in the teeth'.

The Council had been depending on a successful bid to become a pioneer of the Private Finance Initiative. It would have worked in partnership to improve 3,000 properties in the Newlands Generation area.

The blow follows hundreds of legal notices being served on Bradford Council claiming their homes were health hazards - mostly because of mould growth - and giving them just weeks to do the work.

The Council says people jump the queue in this way, making their work priority although in many cases they have not even approached the housing department. The notices are served under the Environmental Protection Act.

The five Newlands estates - Ravenscliffe, Fagley, Bradford Moor, Thornbury, Greengates and Thorpe Edge - have received £15 million from the Government's Single Regeneration Budget.

It funds projects which can lead to jobs as well as other initiatives, including tackling crime and drug problems. But housing improvements are not included in the SRB award.

Today chairman of the Council's housing and environment committee Councillor Jim O'Neill invited representatives from the Government offices in Leeds and Regional Development Agency to see work already being done to improve homes in other areas and to show them the Newlands problems first hand.

And he called on families to contact their tenant associations and try to think of innovative ways to solve the crisis.

Coun O'Neill said: "I want to have talks with the associations and will leave no stone unturned until we come up with a way of tackling these houses."

Chairman of Ravenscliffe and Greengates Residents Association Dominic Sheeran said: "This is a kick in the teeth for the residents. Our association shares the dismay of the many other voluntary groups working on these estates. It proves that the Government is not concerned about the problems of disadvantaged and deprived people in this part of Bradford. The Council is now in danger of becoming a 'social slumlord'."

Bert Beaumont, 76, vice president of Fagley Tenants and Residents Association, said: "There is so much boarded up property . There are steel-framed windows from the 1940s and doors collapsing."

James Drummond, 56, moved into his council house in Norbury Road with his wife Sheila, 37, and their children Doris, 10, and twins Carol, 4, and Heather, 4, just over a year ago.

Mr Drummond said: "It's terrible news. We've always supported Labour and when Jack Straw came to look at the estate last year, he said they would improve the houses. The Government has promised us everything and given us nothing."

The Government picked eight pathfinder authorities, making Leeds the only pilot for Yorkshire. The successful councils will now prepare detailed schemes and the Government will give them permission to borrow stipulated funding. A Government spokesman said it was too early to comment on the amounts involved.

Coun O'Neill said he believed the bid had failed because of the wide areas it covered, while other authorities had put in for smaller projects.

Converted for the new archive on 30 June 2000. Some images and formatting may have been lost in the conversion.