A PLUMBER working for a council which has discovered a #4.8m deficit in its building and roads accounts earned #54,000 in one year, it emerged yesterday.

The figure was #4000 more than his department head, Ken McLeod, who has been suspended from his #50,000-a-year job pending the outcome of an inquiry at North Lanarkshire Council.

A report by external auditor Price Waterhouse, brought in by the council after the deficit was discovered, revealed that two other workers in the department - a chargehand and a scaffolder - were paid #41,000 and #32,900 respectively after obtaining ''exceptionally high levels'' of income from bonuses and overtime payments. This made them among the highest paid town hall manual workers in Scotland. The plumber earned a basic salary of #10,600, the chargehand #12,200 and the scaffolder #9900.

Price Waterhouse also uncovered what appeared to be an #800,000 stock ''write-off'' and police could be called after further investigations by the auditor.

The report, presented to the council's policy and resources committee yesterday, said: ''A more detailed investigation into this deficit is required before it is possible to conclude whether stock has been misappropriated or if there has been a breakdown in the processing procedures which has resulted in this write-off.

''Based on the lack of apparent control over the direct labour organisation (DLO), it would be imprudent to discount misappropriation at this stage.''

The auditor said there was a lack of detailed monitoring and the council's direct labour organisation ''was not and indeed is still not capable of producing accurate and detailed job by job analysis which would identify which jobs were making a surplus and which were contributing to the deficit position.''

The report referred to a ''fundamental breakdown'' in monitoring and control of the DLO's results at all levels within the council.

It said the main reasons for the deficit was because of too much concentration on turnover without thinking about costs or profit.

Bids for contracts were made against a backdrop of rising labour and material costs while the bonus scheme led to a number of workers receiving increased bonuses of up to 100%.

Council chief executive Andrew Cowe told councillors: ''The department's budget was almost an irrelevance and an effective job costing system did not exist.''

He said the council could face a further penalty, this time in work lost, because 58% of the DLO's capital works would be retendered, including a #30m housing maintenance contract.

Council Leader Harry McGuigan told the meeting of the ''bombshell'' dropped on his desk on Wednesday by Mr Cowe. At no time over the last year had reports about the performance of the DLO indicated that such a massive deficit was being generated.

Councillor McGuigan said: ''I felt gutted when I was told and I am determined we are going to ascertain exactly why this happened and who is responsiblefor this situation within this council.''

SNP group leader Richard Lyle said: ''More than 1663 people earn their living from this department and I think we have to try and safeguard these people who through no fault of their own are facing redundancy.''

Scottish Secretary Donald Dewar has called for an interim report on the deficit to be carried out by Scottish Office officials.

Mr McGuigan added: ''It's a very damning indictment of that department and it leaves me absolutely furious, baffled and devastated that such a system could have been in operation there.''

He said if the huge stock write-off ''is found to be correct then it would have to be investigated by the police''.

Councillor Daphne Sleigh, Scottish Tory spokeswoman on local government, said the council's leaders seemed ''hell bent on overtaking the reputation of its predecessor, Monklands District, as the sleaze capital of Labour-run West Central Scotland''.

SNP parliamentary local government spokesman, Andrew Welsh MP, said: ''The North Lanarkshire scandal is every bit as serious as Glasgow, Govan or Renfrewshire.''

Donald Gorrie MP, of the Scottish Liberal Democrats, said: ''North Lanarkshire has not learned from the lessons of other councils, so the professional and political management has to be opened up to serious criticism.''

Local government union Unison said it would work with the council to help solve the problem but would not ''lie down and see their jobs taken away because of inept management.''