DEMANDS have been made for the resignation of a senior Winchester city councillor over the collapse of a local charity.

The Winchester Alliance for Mental Health went into liquidation in December, owing some £330,000 to the city council.

Now Robin Atkins, a fellow of the Institute of Chartered Accountants, has called for Kelsie Learney, portfolio holder for finance, to resign.

Mr Atkins claims she failed to properly oversee the relationship between the charity and the council.

The debt to the council of unpaid payroll soared from £76,000 in December 2002 to £385,000 in February 2004.

Mr Atkins said the problems at the WAMH started in December 2000 and were well known by 2002.

He told the Cabinet that he believed Ms Learney had failed to adequately supervise the explosion of debt.

"WAMH was insolvent and should have stopped trading sometime in 2002 or 2003," said Mr Atkins, chairman of Alresford Town Council and a former Labour candidate in city council elections.

"The city council loss of some £350,000 would have been substantially lower if the finance portfolio holder had acted prudently and professionally. The finance portfolio holder has failed in her duty and should resign from the Cabinet immediately."

Concerns about the charity were first raised by Councillor George Hollingbery in 2003. He resigned from the charity's board of trustees when his warnings were unheeded.

An external investigation by Price Waterhouse Coopers is expected to shed more light on the issue shortly.

Ms Learney said: "With hindsight it is easy to say we should have pulled the plug earlier but the council would still have lost money and doubtless Mr Atkins would still be calling for my resignation for shutting down a valuable charity which, if it had continued trading, could have paid us back."

She added: "I believe taking responsibility means that, when things go wrong, you stick around to sort them out and don't walk away."