THE Government has refused to sanction a #28m management-employee

buy-out of Strathclyde Buses, a decision which provoked an angry

political reaction.

After almost two years of negotiation, council leaders and the

management-employee buy-out group had been confident of Scottish Office

blessing for the deal.

However, they were dismayed yesterday when they learned of the

Secretary of State's opposition.

In a letter to the council, Mr Ian Lang said he was not convinced the

offer was within the range of prices which might have been achieved had

an open market sale been pursued.

Councillor Malcolm Waugh, chairman of Strathclyde region's roads and

transportation committee, immediately requested an urgent meeting with

the Secretary of State.

In a letter to Mr Lang he says: ''I find your decision to refuse

permission for the offer to proceed extremely disappointing.''

Liberal Democrat leader Dr Christopher Mason was less circumspect,

claiming the Scottish Office had ''led Strathclyde up the garden path''.

He explained: ''Scottish Office officials gave us every reason to

suppose that the Secretary of State approved of the deal.

''I'm concerned that they should have apparently done a U-turn. I'm

concerned because we know that tremendous pressure has been exerted by

private companies to block this deal.''

Councillor Mason added: ''Mr Lang owes the public in Strathclyde a

very full explanation of his decision.''