The Legal Services Commission (LSC) says between it and the East Riding Council more than £500,000 will be pumped into legal services through a new Community Legal Advice network – which should be up and running by September 2009.

But it could mean the disintegration of the current system, which has volunteers as its backbone, consisting of the Bureaux in Boothferry – with outreach services in Pocklington, Market Weighton, Brough, Snaith and Gilberdyke – and Bridlington with outreach services in Driffield, Hornsea and Withernsea.

As part of the process, the CABs will now have to bid against commercial organisations to continue to get funding. Bridlington and Boothferry CABs currently receive £161,000 a year from the East Riding Council.

A similar process in Hull saw Hull CAB lose a large part of its funding when preferred bidder Sheffield-based A4e – which describes itself as "a market leader in global public service reform" together with Howells solicitors – won the tender.

Celia Evans, of Goole CAB, which has been in the town since 1972, said: "My argument would be if it isn't broke don't fix it.

"Historically, volunteers are part and parcel of the CAB service. They come and give their time free but they come for lots of reasons and get a lot out of it.

"It is two-way traffic and it has a very well recognised training course and a lot of it is a springboard to future employment.

"We have a good track record, we are well established and we have done a lot of work for people in our communities – we are not going to go down without a big fight."

Bridlington CAB manager Yvonne Kurvits said they faced closure without their core funding from East Riding Council, adding: "It's a sad day that they are putting at risk a well-established community-based voluntary service and potentially replacing it by something that is untested and doesn't use local volunteers. In themselves there's nothing wrong with profit-making organisations but you have to question why there's any push to replace volunteer-based organisations with profit-making organisations.

"What's the sense in it and where's the added value?"

The CABs now hope to find a legal partner so they can extend the range of advice of offer and submit a strong tender bid.

The LSC and the Council say in a statement that they "will be able to combine their funding and knowledge to jointly procure an integrated service that better meets the needs of people in the area."

It says there has been a recent decline in applicants for civil legal aid, in contrast to the rest of Yorkshire and the new network "aims to help people in rural areas overcome barriers to finding the advice they need."

Northern regional director of the Legal Services Commission Peter Nelson, said: "We believe there is currently insufficient supply to meet the needs of local people and this issue is further intensified by the rural locality and transport links. This approach will present a much-needed gateway to the legal system that clients can access early in times of crisis."

Coun Jonathan Owen said the Council had "no choice but to go down the route to get the increased level of coverage in the East Riding."

He added: "In my heart of hearts I would hope the CAB can tender for the work and put in a successful tender."

A five-week consultation will soon gather the views of stakeholders, including MPs.

Currently the Boothferry CAB receives about £32,000 a year from the LSC, as well as cash from East Riding Council, Goole Town Council and other parish councils.