The first cracks appeared today in the fragile accord between the minority Izquierda Unida government of Manilva and their 'partners' the PSOE.

In a special meeting of the full council earlier today one of the main points of order was the award of the contract for provision of drinking water and sewerage services to the utility company Aquagest.

The PSOE refused to sanction this and called for the point to be removed from the agenda, citing the need for a feasibility study into a partnership arrangement which would see the municipality maintaining a 51% controlling stake.

A vote saw the 5 IU councillors voting to reject this motion, whilst the 4 PSOE plus the two former ASM councillors Augusto Gil and Yolanda Holgado, newly affiliated to the PSOE voted in favour, whilst the remaining councillors abstained, thus effectively blocking the Aquagest contract.

The Mayoress, Antonia Muñoz, criticised this move claiming the PSOE were putting political manoeuvring above the public interest as the deal would have seen a 5 million euro injection into the council's coffers, 1.8 million of which was destined to pay off debts to suppliers with the remainder being used to pay council employees' wages till the end of the year.

She went on to claim that this was political revenge for her refusal to admit the two rebel ASM councillors, as part of any IU/PSOE coalition.

In reply Salvador Zotano, spokesman for the PSOE, denied this was a political move and that we shouldn't be selling control of this essential utility for 5 million euros, and that the government should be capable of meeting its wage commitments without having to "enslave" the people into making such deals.

He went on to assure that his party will be quite prepared to approve the contract on production of a feasibility study, and assurances that Manilva retains that majority stake.