A top-level meeting between Bradford social services chiefs and Department of Health officials takes place next month to thrash out a deal over the future of two young brothers.
The boys, aged three and six, were taken into care by social workers together with five other siblings after their parents were deemed unable to cope.
The two youngest boys were then put up for adoption by Bradford social services, in a decision opposed by the 'natural' parents. A judge sitting at Leeds Crown Court then found for the parents, saying Government guidelines prevented him from granting an adoption order until a new family had been identified and matched for both children. He adjourned proceedings for a family to be found.
Bradford Council then appealed, insisting the judge was not bound by guidelines issued last August.
The authority argued that the guidelines could create a 'chicken and egg' situation: parents were reluctant to adopt children until all legal actions had finished, but the case could not be settled until a suitable adoptive family was found.
Lady Justice Butler-Sloss, sitting at the Court of Appeal in London yesterday said: "It seems very odd that a judge who has statutory duties should be bound by the guidance to the extent that he cannot do what is right for a particular child.
"But that is only a preliminary view, and not necessarily what our judgement will be."
The case was adjourned and the Council hopes that the meeting with top Department of Health officials will resolve the matter.
Mike Stow, assistant director of social services, said: "It's an important point of legal clarification that will enable Bradford Council to effectively plan for the future of these children."
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