Teesside mayor Ben Houchen stands accused of "hiding behind a cloak of secrecy" over a deal that saw 90% of shares in a major redevelopment scheme handed to firms with Tory links.
Labour has hit out at Boris Johnson's northern ally, after the vast majority of shares in Teesworks - the 4,500-acre former Redcar steelworks site part of major regeneration plan to create 20,000 jobs - were transferred into private hands.
Until December, 50% of the shares were in public ownership via the area's South Tees Development Corporation.
But at a behind-closed-doors meeting of the Tory-dominated Tees Valley Combined Authority, it was agreed 90% of its shares would be awarded to joint venture partners JC Musgrave Capital and Northern Land Management.
Among the directors of Northern Land Management is Ian Waller, who has donated £7,000 to Ben Houchen, £2,500 to Chief Secretary to the Treasury Simon Clarke and £2,500 to Bishop Auckland's Tory MP Dehenna Davison.
Meanwhile, Joseph Christopher Musgrave, of JC Musgrave Capital, donated £3,000 to the Conservatives in 2015.
Teesworks will be part of Teesside's freeport, meaning the area will also benefit from light regulation and tax breaks.
Cabinet members of the Tory-dominated Tees Valley Combined Authority signed off the new agreement last year, with members of the South Tees Development Corporation also giving it the nod.
Teesworks has benefited from huge amounts of public funds to make the site safe since SSI closed in 2015, including £71m in 2020, but the STDC will now keep just a 10%, according to Companies House.
Mr Houchen has refused to comment on the donor's links to his party, but said private sector investment was key to bringing new jobs.
Stockton North Labour MP Alex Cunningham said: “The Conservative Tees Valley Mayor is selling the people of Teesside down the river and hiding behind a cloak of secrecy over how he does business and chooses associates to work with.
“The development at Teesworks should benefit local people, not the pockets of big businesses and Conservative donors, yet with no public announcement or scrutiny the Conservative Tees Valley Mayor has handed 90% of ownership of Teesworks to a small group of people, some of whom have donated significant amounts of money to either him personally, or Conservative MPs and Party.
“The stench of cronyism is strong, but sadly not surprising from a party that has handed out £3.5 billion worth of contracts to Conservative-linked businesses throughout the pandemic.
“Taxpayers footed the bill when the site was purchased, and it is only right that the wider public get the benefits of the development. As the result of a quiet takeover sneaked out just before Christmas, this won’t be the case. The Conservative Tees Valley Mayor has serious questions to answer about this.”
Mr Houchen has said he will "work with anyone who can help" bring jobs to the area.
He said: “In July 2020 we were delighted to announce, following the unanimous approval of the STDC board and the leaders of the five local councils, that we would be working with a Teesside owned and run private partner, so that we could utilise their expertise and experience to accelerate redevelopment of this mammoth 4,500-acre site, getting the land oven-ready and jobs created years ahead of schedule.
“For years, Teesside was divided under the leadership of people like Andy McDonald and we had nothing to show as a result. Well, for the first time in decades, we’ve brought Teesside together. With the development corporation, the private sector and the local council working hand in hand, we are delivering something truly transformational that will benefit local people for decades to come.
“Since taking control of the steelworks twelve months ago we’re working tirelessly preparing the land so that we can create thousands and thousands of jobs for local people."
A spokesperson for JC Musgrave told the Teesside Gazette the "nature and scale" of STDC projects meant the private sector needed to be "at the heart" of the project.
The spokesperson said: "In terms of the commercial agreement between STDC and the joint venture delivery partner, the initial agreement was a 50/50 split.
"But this has changed recently to a 90/10 split in favour of the JV (joint venture) delivery partners.
"This change reflects the significant capital investment required to complete the site in terms of continued land remediation and preparation to meet future inward investment opportunities and job creation."
