The six, small unitary or metropolitan LEAs are discussing with ministers the proposal which aims to overcome the disadvantages of their size. They would share services such as subject and improvement advisers and work together to recruit staff, cut costs and attract external funding for schools.
Blackburn with Darwen, Blackpool, Bolton, Bury, Oldham and Rochdale have been working with private firm Capita on the proposals which could be in place by 2004.
Next week Essex councillors will decide whether or not to contract out its services. Around 1,300 staff could be transferred to one of two private bidders, Serco or Cambridge Education Associaties, as part of a pound;300 million seven-year deal.