A south London council is to award a contract worth pounds 500,000 to private detectives hired to track down council tax dodgers, it was revealed yesterday.

Lambeth council is the first London authority to admit openly that it plans to use the controversial service, although other councils are understood to be using tracing agents in secret. Opponents fear such get-tough tactics may infringe civil liberties.

Lambeth has already carried out two pilot projects using private investigators to chase poll tax and council tax debt. Within the next two weeks it will choose a firm to carry out the two-year contract. The council hopes the agents will be able to claw back some of the pounds 20m recorded as outstanding debt in March this year.

Lambeth, which until the May elections, was under Labour control, has an annual budget of pounds 313m, pounds 55m of which comes from council tax. However, it has one of the worst records for debt collection. The authority is now a hung council, with 24 Labour seats, 24 Liberal Democrats, and 16 Tories. The scheme to hire detectives was put forward by the Liberal Democrats.

A spokeswoman for the authority said: 'The investigators will receive performance-related pay. If they do not trace the debtor then they won't get any money themselves.

'The firm which gets the contract would have to adhere to a strict code of conduct. No threats, no violence. The agents will be knocking on doors, trying to find out if the people who owe money still live there, if not then where they might have gone and where they are working.

She added: 'It is a tougher line, but people have got to realise that they cannot get out of paying council tax.

But officials also hope that the use of private detectives will enable them to write off bad debts more easily.

'To write off a debt you have to prove you have made the effort to trace it. But if you cannot find the debtor or their employer and you cannot trace them through the benefit register, there is a point where you can legitimately write it off and that is the end of it.'

The authority has also been stepping up more direct means of chasing evaders, including court summonses. And since last September a telephone recovery section, where staff are briefed to make 'polite and helpful phonecalls, has netted pounds 258,527 in arrears on the unpopular poll tax - or community charge - which was replaced by the council tax.

'People have even thanked us for resolving confusing bills,' added the spokeswoman.

But yesterday a spokesman for Liberty, the civil rights campaigners, said it was unlikely residents of Lambeth would telephone to say thank-you for the private detective service.

'It is something we are completely opposed to. While local authority staff are accountable private firms are not. Unless you go round with an investigator eight hours a day how do you know he is not going to overstep the code of conduct?