A company set up to run Oxford city centre could create conflicts of interest, councillors have warned.

Plans for the not-for-profit company have been taking shape, and the council's executive board has agreed, in principle, to set up the company next year.

The council will provide £100,000 of funding, following the production of an acceptable business plan.

But a number of councillors have serious reservations about the scheme, and believe the company could take decisions against the city's best interests.

Green councillor Dr Woodin told the executive board: "The company could have conflicting priorities to the city council in areas such as the treatment of the homeless, policing, or street-sweeping.

"If the company begins to think that the city centre is theirs, then that could raise all sorts of policy issues."

He said further work should be carried out to clearly define the company's remit.

Labour councillor Bill Baker said: "The city centre is still part of this city and should remain the concern of the city council."

One task for the new company could be organising Oxford's Christmas lights, which were withdrawn ten days early last week. On November 29, one span collapsed in Queen Street, injuring a pensioner.

City centre manager Marcus Lapthorn is employed by the city council and the private sector to improve conditions for shoppers.

He is at the forefront of plans to set up the management company, which would encourage city centre businesses to invest more to improve the shopping area.

The company would look after the city centre within St Giles, Magdalen Bridge, Folly Bridge and the railway station in Botley Road.

It would raise money through traders' membership fees, commercial income and city council funds. Many traders have already welcomed the proposals.

Mr Lapthorn told the executive board: "Progressive local authorities across the country are embracing this idea.

"In Bolton, the management company is working in partnership with the council and it is proving very effective.

"It is difficult to say 'yes' to something like this because not many people like change."

In the past, a city council-run working party took the role of persuading local businesses to increase inward investment, but it had limited success.

Mr Lapthorn believes that a management company alternative, which has also proved successful in Coventry and Middlesbrough, would be more successful at attracting investment from businesses because it could be tailor-made to suit their needs.

Under proposals, the city council would take up only three places on a board of 16 members committed to city centre management initiatives.