HOPES are rising that ministers are about to approve a bold bid for £4.65m of public funding to revive a North-East airport and create up to 1,400 jobs. 

The Northern Echo understands that a team led by Nick Clegg, the Deputy Prime Minister has been impressed by Durham Tees Valley Airport's (DTVA) latest attempt to secure cash from the Regional Growth Fund and later this month could approve a cash injection for the ailing site.

Last October, Mr Clegg's decision to reject the airport's £5.9m funding bid sparked fears about its long term survival.

Owners Peel Holdings have submitted what they called "a much stronger"  application which shows how a new road and electricity supply would open up land south of the airport terminal for world-leading fire training and aircraft recycling facilities. In short, the aim is for the site to become an industrial park for aviation-related business to help offset losses from passenger operations.

The Southside development would allow Serco to expand its fire training business, which has operated at the airport since 1981, and build a new £7.4m complex to include training rigs, a virtual reality test centre and accommodation for trainees.

The initial plans would create 14 new jobs and help Serco increase its business with firms overseas. 

In addition, aircraft recycling business Sycamore Aviation would build a new facility that can handle jumbo jets. The ambitious firm currently operates an aircraft breakers' yard from a hangar at DTVA that was used by Lancaster bombers in World War II. It is keen to take advantage of the hundreds of aeroplanes set to be decommissioned in the next few years as airlines replace fleets with more fuel-efficient models.

Peel says the growth of these businesses could be a catalyst to attract freight and recycling operators to the site, with the potential to create hundreds of jobs.

Peter Nears, Peel Holdings' strategic director, explained how his team had made its case to ministers.

"It is crucial we get this bid accepted to break into the south side and open it up for development," he said. 

"We responded to the criticism last time that we hadn't made it clear how the bid would help businesses on the site to expand. 

"We have worked closely with Serco and Sycamore Aviation to show how this funding would unlock opportunities for them. We are very hopeful that the Government will give us the go ahead this time around.

"It would allow Serco to operate from one site on the airport and greatly expand its offering. And Sycamore is very keen to move up to the next level to take advantage of the large numbers of aircraft being decommissioned worldwide. There are similar recycling schemes in Spain and France but nothing in the UK. This is a major opportunity for this country to benefit from a growing sector. We have the skills here in the region from the engineering industries and from former RAF personnel." 

Mr Nears pointed to Peel Group's successful track record in securing cash pledges from previous rounds of the RGF, such as the Port Salford freight terminal near Manchester as a reason why the property and transport firm could be trusted with taxpayers' money.

Peel believe that approval for the bid would draw in about £40m of private investment to transform the site.

Longer term ambitions are to improve rail links via the Tees Valley Metro to help workers get to the airport.

Sandy Anderson, Tees Valley Unlimited chairman said: "A successful RGF award would help to secure and build upon the expertise at Serco's International Fire Training Centre at Durham Tees Valley Airport, creating 8 and safeguarding 60 existing jobs.

"Starting the development of Southside will also help underpin a viable passenger airport, securing aviation-related growth in the Tees Valley economy. 

"The new highway and services infrastructure could unlock a  business park with the potential to provide more than 1,400 new jobs over the next ten years."