The national executive committee has agreed to deals in East Sussex, Essex, Hampshire, Hereford and Worcester, Lincolnshire, Shropshire and Suffolk County Councils, Winchester City Council and Swale Borough Council, while reluctantly endorsing a full-blown joint administration in Berkshire.
A source close to John Smith, the Labour leader, said: 'The NEC recognises that while we don't approve of formal pacts it is up to individual local Labour groups to do as much as they can to get their manifesto through.
'If that means coming to a 'business by business' arrangement with the Liberal Democrats, then so be it. It's the common-sense approach.'
There was a 'clear distinction' between business arrangements of that kind and candidates agreeing to stand aside beforehand in elections.
Labour is keen not to see a repeat of what happened in Berkshire before the May county council elections, where several Labour candidates allowed themselves to be formally nominated but then took no part in the election campaign. But the record number of 'hung' councils after the May contests signalled the inevitability of power- sharing after the event.
Under NEC rules, Labour must retain a distinct political identity and must seek minority control. The 10 councils have been given a dispensation, developed before the May elections, to co-operate with other parties. The NEC will review the arrangements in a year.
The committee unenthusiastically sanctioned the Berkshire arrangement after it was, in effect, presented with a fait accompli. But Labour headquarters remains uneasy, despite an assurance by the local party that it will retain a distinct identity. 'We do not endorse the idea of a joint administration,' a Walworth Road source said.
A Local Government Chronicle analysis published yesterday reveals a less formalised approach in the other nine authorities, though most go beyond mere 'business by business' arrangements by sharing committee chairmanships.
Walworth Road stressed that Labour and the Liberal Democrats were 'not going into council chambers with joint positions - it's a process of negotiation'.
Labour is still deeply sensitive over the argument that pre- and post-election pacts should be openly endorsed as the way further to damage the Tories in local contests and defeat them in a general election. The fear is that Labour's identity would be eroded, and votes with it.
The Liberal Democrats repeated their opposition to formal pre- or post-election pacts. But Andrew Stunnell, chairman of the Association of Liberal Democrat Councillors, said: 'For the past 15 years, almost unnoticed, a new style of politics has been emerging. People have placed councils in 'no overall control' and politicians have been compelled to work together.'
Not all power-sharing involves Liberal Democrats. Bedfordshire and Wiltshire each have a Conservative chair and Labour vice-chair, while in Cheshire, a Labour minority was replaced by a Conservative/Lib- Dem administration after Labour rejected three-way power- sharing.Reuse content