Oxford city centre could soon be managed by a private company in a bid to boost trade, tourism and crime prevention.

Councillors are discussing proposals for a management firm to take over duties undertaken by the city council.

The move has provoked mixed reactions. Traders have welcomed the idea, while union leaders have vowed to fight what they see as privatisation.

If the idea is approved by councillors, a non profit-making company would look after the city centre, within the natural boundaries of St Giles, Magdalen Bridge, Folly Bridge and the railway station.

It would raise money through traders' membership fees, commercial income and city council funds.

Any surplus would be used to improve the city's infrastructure.

In a report to the City Centre Management Working Party, city centre manager Marcus Lapthorn said the council's financial difficulties were preventing much-needed investment. He said: "People continue to demand a cleaner, safer, more colourful and better maintained city centre.

"The city council alone is unlikely to ever be able to fund this greater expectation.

"The competing demands on council resources make it impossible to inject the sort of money into the city centre services budget, which will deliver the improvement in standards necessary."

Mr Lapthorn said handing responsibility over to a private firm would lead to many benefits, including police sponsorship to guarantee officers in shopping areas, new signs, street wardens and special events. The company could also provide marketing for traders.

He said the council's city management team was often hindered by local authority regulations and red-tape between different departments.

Mr Lapthorn said: "The company would have a very clear focus - managing, promoting and developing the city centre. It would have no other distractions or responsibilities, so it can target all resources on this single task."

Oxfordshire Chamber of Commerce policy manager Bill McCardle welcomed the proposals .

He said: "We think it could give more focus to work in the city and deliver a better standard of performance. We think it would probably bring improvements in the city faster then has been the case over the last few years, but we need to make sure that whatever the final shape of the company, it has enough power to make a real change."

His views were echoed by a spokesman for the Covered Market Traders' Association, Alan Lester.

He said: "There are loads of things which could be done to improve Oxford city centre. I think there is a general need and a lot of opportunities to promote Oxford and its attributes."

But Martin Gregory, Oxford city branch secretary for Unison, the public sector union, was angry that members had not been consulted on the proposals.

He said: "Our union has vowed to get tough on fighting privatisation. In this case, the community's democratically elected representatives would no longer be in control if a private company was set up.

"City centre management belongs to the public. It is true the council has little money, but this private outfit would be funded through a city council fee or grant and that means it would be subsidised by the taxpayer."

Cllr Jackie Gray, a member of the City Centre Management Working Party, said the proposals were prompted by plans to change the way local government is run and that the company would not be set up for at least a year.