EXPOSURE to asbestos in Lancashire County Council properties could become the next big compensation headache for the authority, it was revealed today.

A Law Lords ruling that employers can be found liable for exposing staff to asbestos -- which can lead to cancer if inhaled for long periods of time -- is expected to cost insurance companies £8billion, with no-win, no-fee solicitors offering to take on cases.

Lancashire County Council is already facing the prospect of having to fund the first £15million of claims after trips and slips compensation cases rocketed.

Now it is carrying out a risk assessment amid fears that it could face a massive shortfall of cash if asbestos and other claims are forthcoming.

Many of Lancashire's schools were built using asbestos, and although the poisonous substance has since been removed, staff who worked in county establishments for long periods of time could only now be finding out they are suffering respiratory problems or cancer as a result.

Coun Tony Martin, in charge of finance at county hall, said: "It is something we have to be aware of but we have not received any compensation claims for it yet and I hope it stays that way.

"The aftermath of September 11 has made insurers very wary of putting out policies to local authorities.

"We already have a problem with the growing number of highways claims which we are trying to tackle but it seems everyone is prepared to sue now and it is getting out of hand.

"This risk assessment will look at every part of the county council to make sure we are doing everything we can to protect and look after people."

Around £2million has been set aside for claims arising from Operation Nevada -- the police investigation into child abuse at county establishments.

Security improvements at schools and social services offices are listed as examples of showing the county is doing all it can to protect users and staff from any unforeseen situation.

Additional staff training is considered a key aspect to make sure no-one undertakes tasks which they are not experienced in, again reducing the risk of something untoward happening.

A report submitted by Coun Martin to the committee stated: "Insurance should be seen as a last resort. It is not a substitute for effective risk management."

It adds that all departments should ensure that the risk management is thorough, because compensation claims wouldl be charged back to the department held to blame.

Council bosses in Blackburn will carry out more tests on a building where asbestos was discovered in a bid to discover the best way to reduce the risk it poses. Fences have been erected around the former bleach works, off Whitebirk Road, Blackburn, and samples taken by analysts at Lancashire County Council which showed the material to be brown asbestos -- one of the most common forms.