It has been dogged by controversy, but it is also the first time Middlesbrough Mayor Ray Mallon has found himself on the side of the establishment against the little guy. And he doesn't like it. Nick Morrison looks at the battle between the mayor and the residents who refuse to go quietly.

TENNYSON Street doesn't look anything special. Two rows of Victorian brick terraced houses facing each other - it could be in any one of dozens of Industrial Revolution towns across the North. At least, if it wasn't for the posters.

Just about every other house in the street has at least one in the window, some have more than one. "We shall not be moved," they read. Others have a picture of the man held responsible for the outrage, above the slogans: "Don't let this man mess with our town," or "Danger: this man wants to steal your home."

"I think it's absolutely disgusting. I like living here and I want to stay living here," says Wilma Hackett. Wilma moved into Tennyson Street in May 1967, just after she married, and has lived there ever since. Now widowed, the 63-year-old insists she is going nowhere.

"There is no way I would move. I don't want to go and I'm not going to go. This is my home, it is bought and paid for, and I'm just not thinking about getting another mortgage," she says.

But Wilma may not have a choice if the man in the posters - Middlesbrough Mayor Ray Mallon - gets his way. Tennyson Street, which lies just behind the town's Linthorpe Road thoroughfare and just ten minutes walk from the town centre, is one of 38 streets listed to be either partially or completely demolished under proposals to remodel Middlesbrough, sweeping away almost 1,500 terraced houses and replacing them with new homes, roads, car parks and shops.

The scheme for the Gresham area of the town has been approved by Middlesbrough Council and next month the authority will learn whether it will be backed by the Office of the Deputy Prime Minister. The council is confident, but the residents have not given up the fight against proposals which have been dogged by controversy from the outset.

Details of the scheme - including which streets were affected - were made public on July 12, just eight days before the council's executive met to make its decision. Hundreds of residents who opposed the plans found themselves locked out of the executive meeting, as officials refused to move it to a larger room. Mr Mallon came in for criticism after he was reported comparing the area to a cancer, which needed to be cut from the rest of the town. Councillors who voted on the plans have been accused of a conflict of interest through their positions as directors of a housing organisation which owns homes in the affected area - and allegation they have denied.

The list of complaints has helped galvanise residents who oppose the demolition, and yesterday it emerged that the Local Government Ombudsman had agreed to investigate the scheme. But Mr Mallon is unmoved. As far as he is concerned, the argument is over.

"I have had the debate. I'm moving this forward," he says. "What I'm more interested in now is getting the endorsement to do it and then looking after the people."

He says while he understands why residents don't want their homes to be demolished, the scheme is in the best interests of the town as a whole. And he insists that the residents who lose their homes will be found something better, either elsewhere in the town or back in Gresham when the rebuilding is complete.

"I'm going to knock their houses down because I believe it is the right thing, but I'm determined that I'm going to do the very best for them so they have a better life," he adds.

The principal charge against Gresham's terraced homes is that people no longer want to live in them. Gresham makes up what the council calls the town's older housing area, 11,500 homes built at the end of the 19th and beginning of the 20th century, mainly to house steelworkers in the rapidly-expanding town.

The council estimates around 800 of these homes are empty - testament to the fact that they no longer meet 21st century aspirations. No gardens, no garages, often without double glazing, they are unloved by today's first time buyer. So the plan is to demolish 1,454 of them, 13 per cent of the total, and build around 6-700 homes, some terraced, some semi-detached, some detached, some flats, in their place.

This path, the council argues, will help reverse the drain which sees Middlesbrough's population fall by around 750 every year. Falling population means reduced grants from central government, made on a per head basis.

"If we don't do this, the body will die," says Mr Mallon. "I have got to make this town more attractive to bring people back, but in the first place I have got to make it attractive enough for people to stay."

Added to this, Gresham homes are in poor condition and the area suffers from a high crime rate. Refurbishment has been tried before, the mayor says, and found wanting. The only solution is to knock them down. Demolition is also the only way the Government will release cash to fund the project - estimated to cost £160m - which will also see some of the surviving homes improved.

But residents fear they are being sacrificed in the cause of the mayor's dream of a "Designer Middlesbrough", a town of pavement cafes and boutiques. Demolishing the streets behind Linthorpe Road will allow the council to move housing further from the town centre, and instead create a valuable site for retailers.

"This isn't about derelict houses, it is about businesses, so why don't they tell us that," says Majahid Aslam, one of the most prominent of the campaigners and whose home in Parliament Street is one of those marked for demolition. "It is about shops and extending the town."

He says residents dispute the council's figures for the number of empty homes, and that Gresham is a relatively harmonious example of a multi-racial community, with nowhere near the level of crime claimed by the council.

Former council leader Ken Walker, who represents Gresham on Middlesbrough Council, says the authority's case for demolition is flawed. He says many of the houses are robust and need only modest refurbishment to make them more attractive to buyers. And he criticises the council's rushing the decision through, and failure to come up with detailed plans for the area before proposing demolition. He shares the residents' suspicions that the plan has little to do with housing regeneration, and more with expanding the town centre.

"It is quite clear that it will create one of the most lucrative brownfield sites," he says. "This is not about the residents, it is about creating a site which will be very attractive to developers."

For his part, the mayor makes no bones about his desire to extend the town centre. Businesses are the key to making Middlesbrough a thriving town and having it compete with other towns and cities in the North, he says.

But Keith Hemmingway, manager of Thirlwell's estate agents, says that up until the demolition announcement, which put an immediate stop to most sales, the housing market in Gresham had been strong, prices jumping from around £30,000 three years ago to £45-50,000.

But he does have sympathy for the council's proposals, with the majority of sales going not to first time buyers but to investor landlords, considered to be a more volatile market. The council's fear is that if the landlords pull out, then prices could collapse.

"The demand from the first time buyer has fallen over the last four years but the market sustained itself with the buy-to-let," Mr Hemmingway says. "As far as the town centre goes, something has got to happen, it can't be left like this."

For the mayor, who had his own fight against the establishment in the form of Cleveland Police during Operation Lancet, being on the other side is a strange experience.

"It feels odd because normally I'm more comfortable with the public, being with them and fighting their case," he says. "Now I'm on the other side fighting the case for the town and that is very uncomfortable and I don't like it. I don't like siding with the establishment line, but the establishment line is the right line."

Back in Tennyson Street, next door to Wilma Hackett is the kind of person the mayor wants to stay in the town. Emma Dyson moved to Middlesbrough from her home town of Leeds to study graphic design at Teesside University. After graduating, she stayed on, and is working as an illustrator. She bought her house three years ago and has just had it fitted with central heating and double glazing.

"I wanted to stay around here and set up a business here. It is a really nice area," says Emma, 22, who lives with boyfriend Mark Davies, also 22. "There is so much going on here at the moment and so much young talent. In ten to 15 years this place is going to be a cracking place to live, but I don't see why they've got to throw people out of their homes.

"We will have to see where they are relocating us, but we might just move away. I wouldn't mind a place in Manchester."