Guard sell-off plan dropped

Plans to sell off the guarding of some of Britain's most sensitive military establishments to a venture capital company have been abandoned, it was announced last night. However, the company is still expected to buy up another defence agency, using miners' and rail workers' pension fund money to do so.

Roger Freeman, the public services minister, said last night that the Custody Services agency, which provides security for the chemical and biological weapons research establishment at Porton Down in Wiltshire, will remain in the public sector.

Ministers first tried to sell the agency to an investment company called Apax Partners, but gave up last week after apparently failing to reach agreement over the transfer of staff pensions.

Ministers are believed to have also talked of selling the agency to CinVen, the former venture capital arm of British Coal's pensions branch, which has been bought out by its management but which still handles pension funds for British Coal and British Rail.

Although CinVen had not made clear who would guard the establishments at research bases such as West Freugh, in Scotland, where missiles and bombs are tested, the deal was thought to be a buy-out by the existing management with the firm's financial backing.

However, the support services arm of the Defence, Evaluation and Research Agency, which provides information technology, cleaning and property services, is still expected to be sold to CinVen.

The deal is expected to be announced within the next few days and pushed through before the general election.