The Local Government Association is to join the National Housing Federation in fighting to have stamp duty rules changed.
An LGA spokeswoman said it would work closely with the NHF to develop a joint approach to lobbying departments including the Office of the Deputy Prime Minister, the Treasury and the Inland Revenue.

However, she said it was unlikely that the LGA would participate in the NHF's legal challenge, led by New Charter Housing Association, although that option had not been ruled out.

Meetings were held between the LGA and NHF last week to consider what advice could be issued to both bodies' members.

The NHF also revealed that its appeal for financial support for a "fighting fund" to help New Charter challenge the Inland Revenue had received solid initial backing from members.

NHF policy officer Bob Wilson said a "significant number of pledges" had been received, but chose not to reveal how much.

He added that unpaid stamp duty on tenancies taken out before March 2000 affected a vast number of social housing providers. The NHF says this costs the sector £2m a year, with the legal costs of the challenge at 2% of this, or £40,000.