Around 8000 local government employees are expected to be transferred to an arms-length company to curb what council leaders claim is the threat of privatisation.

Glasgow City Council is in talks with unions over the creation of yet another limited liability partnership (LLP), where the council would provide the company with the cash and staff to run its home care, cleaning, janitorial and catering services, and will seek approval this week to press ahead with the plan.

The council will also seek this week to reshape its land and environmental services department, which could see cemeteries and crematoria, on-street parking, waste disposal services and transport for people with learning disabilities run by either private firms or arms-length companies.

But opposition politicians have accused the council's ruling Labour group of "putting the fear of God" into workers so it could come up with a solution which fits in with its agenda of hiving off services, while union sources claim that although LLPs are preferable to privatisation the timing for the council is "convenient".

The move towards the creation of another LLP follows claims last week that 10,500 council jobs were under threat from being put out to commercial tender because two departments failed to meet their three-yearly rolling financial targets, a requirement for what are termed Significant Trading Operations.

If that happens it would be difficult for the council to compete against private firms paying minimum wage rates.

Council leader Steven Purcell said: "Our review was quite clear. If we were to protect the jobs of our employees and ensure continuation of services, then doing nothing was not an option.

"If no action was taken by the council, it's likely that we would have been forced to put these services out to competition, and winning contracts would be very difficult."

But Alex Dingwall, the SNP's personnel spokesman and a Unison official, said: "Two weeks ago there was no crisis when the council was aware of the financial state of both departments and now Labour are saving over 10,000 jobs. Why are they rushing into a process the government is reviewing and could do away with rather than await the outcome?"

Over the past few years the council has created about half-a-dozen LLPs, including City Building which employs 2250, Community Safety Services, with a staff of 500, City Parking, a body to run its markets, a partnership with private firms to run IT and a trust to run museums and leisure centres.

Although other local authorities have created trusts none has gone anywhere near the lengths of Glasgow to hive-off services.

Alex McLuckie, of the GMB union, which includes around 7000 of the 8000 direct and care services staff, said: "Councillor Purcell is certainly making the right sales pitch and if this avoids privatisation and provides the same level of pay we would be willing to explore the option. But our concern is this is a half-way house to privatisation."