The proposed merger of two councils has sparked fears over job losses.

Consultants have drawn up a detailed business case highlighting the pros and cons of closer links between Worthing Borough and Adur District Councils.

Supporters of the merger said it was in the best interests of taxpayers facing ever higher bills but critics argued that it would cost a fortune to implement.

A number of senior officers from both Worthing and Adur would be made redundant in the initial shake-up, expected to be completed in April 2009.

This would create a single set of officers in charge of both councils.

At present Worthing employs around 650 staff and Adur 420.

Bob Smytherman, leader of Worthing's Lib Dem opposition, feared a downsizing of the workforce as departments currently run separately by both councils, such as planning and revenue, merged.

But Keith Mercer, leader of Worthing council, said it was far too early to say whether there would be future job losses among the rank and file.

Mr Mercer said regular meetings were being held with the staff to keep them up-to-date.

In their 55-page report, the consultants warned: "If we are not to deliver savings and efficiencies via a reduction in overheads within partnership working or shared services, it is hard to see how relatively small district and borough councils such as Adur and Worthing will be able to meet the stringent targets ahead without major reductions in the volume or quality of services."

They said financial issues were of paramount importance.

The merger of Adur and Worthing would make the joint council the seventh largest municipal district in England, with a combined population of 160,000.

The councils already provide some services together, including refuse and recycling, which had been hailed a notable success.

But both sets of councillors would retain their independence, enabling them to set their own annual budgets, although they would hold regular joint meetings.

The consultants warned that if the merger didn't work, the cost of separating the councils would be huge.

Coun Smytherman said he wanted to know how much would be paid out to senior officers being made redundant, and the price, ultimately, of a combined IT network.

He said: "I cannot believe it is in the interests of Worthing. Adur is the only authority which will benefit out of this."

Worthing council said a decision on whether to pursue the merger would be made in March.

Ian Lowrie, chief executive of Adur and interim chief executive of Worthing, said: "All we are doing at present is considering the work we have done so far on this project.

"We need to be sure that this proposal will serve the customers of the two councils and reduce overheads before taking any major decisions. It is only right that we should do this thoroughly."