A CHOCOLATE company has been accused of pulling out of a £300,000 town centre sponsorship over fears it will suffer from bad publicity.

Nestle was to sign a three-year sponsorship deal with Stockton Borough Council to promote the town centre and pay for events such as the International Riverside Festival and Christmas lights.

The deal fell through yesterday when the company decided not to attend a cabinet meeting, following controversy over the company's baby milk products.

Councillor Bob Gibson, leader of the council said: "Naturally, we are disappointed the company decided to withdraw the sponsorship proposal. We appreciate they made a commercial decision - they had other options and opportunities to consider.

"We had invited both themselves and interested parties to a special meeting of our cabinet to discuss the proposals, which unfortunately they decided not to attend. This was to avoid an open debate and potential negative publicity."

However, a spokeswoman from Nestle said: "Unfortunately, the sponsorship issue has been caught up in a complex procedure, which has the capacity to cause controversy within the ranks of the council.

"We have no wish to be part of any process which causes dissension or a split within the council. We are therefore regretfully withdrawing from the formal process with immediate effect."