A group of residents who ran a non-profit PR agency to promote projects in their community have been sacked.

East Communications employed four people to publicise the work of eb4u, the organisation given £47 million from the Government to regenerate east Brighton.

But eb4u's board has voted not to renew the contract and has replaced the agency with Priory Partnership, a private firm based in Brighton.

The decision has angered people from east Brighton, identified by ministers as a socially-deprived area with among the highest levels of unemployment in Sussex.

Residents say local employees and companies should be given priority by eb4u.

Hamish Mackenzie, of Moulsecoomb, Brighton, told a council scrutiny panel evaluating eb4u's work: "It's diabolical. They make out residents are going to have a say and get their hopes up and then kick them in the teeth like this.

"Is it any wonder the residents don't think eb4u does anything for them? These were people from east Brighton working for them."

East Communications, led by Hannah Corbett, was set up in April last year, although the team had been working for eb4u for three years.

Miss Corbett said: "eb4u gave us the start we needed.

"However, to be a sustainable business in the long term, it is far better for us to rely on generating an income from clients in the wider city through selling our public relations and design expertise.

"Some of our existing clients receive eb4u funding so we are still working in partnership and will continue to do so."

Miss Corbett, who has worked in PR for private companies for more than eight years, has been able to retain one employee and hopes the business will expand so she can re-employ the others.

She said: "Having worked in both the commercial and community sectors I believe social enterprises offer the best of both worlds.

"Not only do our clients receive a top agency service but by choosing us they are helping disadvantaged communities improve their communications."

Sean Hambrook, deputy director of eb4u, said: "Funding for our previous communications project, provided by East Communications, concluded at the end of June 2005.

"In looking to the future, the board has recently been engaged in a review of communications and the ways in which it can best be delivered.

"The review process included tendering the media relations and newsletter services against a reduced budget to a range of potential providers, including East Communications.

"The successful tenderer arising from this process was Priory Partnership, a Brighton-based PR and marketing company.

"eb4U wishes East Communications every success as they continue to operate as a social enterprise company."