A project for youngsters with autism has been given a three-month stay of execution.

National Children's Homes' Action for Children gave Brighton and Hove Council notice of ending the Palmeira Project in Hove in August after problems over keeping to the budget.

Last week the council's policy and resources committee rejected suggestions that it should stay open for another year at least. But now the council has negotiated another three months with NCH, making the closing date the end of November.

The extension will give time for both parties to work with parents to plan a smooth transition to care from the council. But NCH said there is no possibility that the project could continue beyond the extension date.

Originally the cost of running the project was put at £357,000, but NCH was spending £100,000 a year more than that.

The council has agreed to pay for an independent advocate to make sure the children's best interests are secured in the transition to centres at Tudor House in Brighton and Drove Road in Portslade.

Council leader Lynette Gwyn-Jones said all the money currently spent on the Palmeira project could be diverted into new care packages for the children.

She added: "We are acutely aware of the difficulties a change of environment can cause to people with autism."

The council believes it can provide a first-class service for more children than NCH while keeping costs under control.

NCH has been facing financial problems and in its annual report last year, treasurer Lord Murray said it had raised £12 million through land and property sales.

Coun Mitchell said: "We are watching with interest to see what NCH plans to do with its very valuable property now that it has called time on the Palmeira Project."