A BID to save a troubled furniture firm failed because administrators allowed it to do so, a company boss has claimed.

DisplayWorld Group says it put forward a rescue package to salvage NESS Contract Furniture Limited, which has been crippled by a cash crisis.

However, Derek Robinson, DisplayWorld’s managing director, alleged the effort was thwarted by administrators and creditors.

But administrators swiftly countered the allegations, saying DisplayWorld’s offer was simply not commercially viable.

Scores of workers have been redundant at NESS, which has factories in Croxdale, near Durham City, and Newton Aycliffe, County Durham.

Its future is now in serious doubt, and Mr Robinson said shop fitter DisplayWorld, which works with Marks and Spencer and Ladbrokes, has now walked away from a deal, which included plans to create up to 100 jobs.

He said: “I am extremely disappointed at the outcome and surprised the administrators and secured creditors appeared unconcerned about the plight of a workforce that had been loyal to the business for decades.

“Obstacles were placed in the path of closing the deal after terms had been agreed, and it gave us the impression there was never a real intention on the part of the administrators, or possibly the secured creditors, to make this rescue succeed.

“I don’t know if there are other plans for the site, but it’s a very disappointing outcome for former workers and customers who had stayed loyal in anticipation of an agreement being concluded.

“Those customers will now get their products overseas because NESS was probably the last manufacturer for this type of product operating in the UK.”

Founded at the end of the Second World War, NESS previously employed about 75 staff, ranging from skilled craftsmen to office staff.

However, a number left when the company went into administration in February, and a further 46 workers were made redundant earlier this month.

A skeleton team of seven were retained to help find a new owner for the company, which became a market-leader in designing and making furniture for colleges, hospitals, fast food restaurants and supermarkets.

Robert Adamson, a restructuring partner at Leeds-based accountancy firm Mazars, which was appointed joint administrator, said he understood the upset caused to workers in NESS’ demise, but reiterated there were issues with DisplayWorld’s bid.

He added: “The administrators have a legal duty to the body of creditors and every effort has been made to dispose of the business as a going concern, and to prevent job losses.

“The offer did not represent a commercially viable option and it is with regret a sale was not completed.

“It is very sad for the many people that worked at NESS.

“The company went into administration due to the deterioration of its working capital position owing to price competition and contract losses, from which it was unable to recover

“The administrators inherited a loss-making business and delivered a short-term strategy, which allowed the business to trade for a short period while a sale was being sought.

“Unfortunately, a sale has not been achieved and redundancies have been made because the business could not continue to trade at a loss.”

According to NESS’ last accounts, which covered the period to December 31 2013, the firm was showing a loss of £1.3m.

It was bought in June 2013 by Sussex-based private equity investors Benula Capital Limited, which said it wanted to “provide targeted investment to capitalise on the growth opportunities in the UK and emerging prospects abroad.”