COUNCIL chiefs have been barred from buying the assets of the doomed One North- East regional development agency – raising fears of a damaging “fire sale”.

A plea for town halls to be offered deferred payment terms to keep assets in local hands has been rejected by the Government.

They can only be transferred to local authorities if they pay the market value, which would mean a bill of many millions of pounds.

The move effectively makes it impossible for cash-starved councils to step in as they struggle to implement unprecedented spending cuts.

It also clears the way for the Department for Business (BIS) to announce which sites will be sold to private bidders – a statement expected in days.

The decision was condemned by Labour’s business spokesman, John Denham, who said: “The Government has given local authorities no option: buy now – or lose out.

This fire sale is typical of a government that prizes shortterm fixes over long- term, sustainable growth.”

One North-East was among several regional development agencies (RDAs) that lodged a plea for many assets to be transferred to councils, arguing for payment later.

Its plans for its 48 land and building assets – a portfolio worth £180m – included: 􀁥 Old Shire Hall and the former Durham ice rink, both Durham City, to be transfered to Durham County Council; 􀁥 Evans Incubator centre, Newton Aycliffe – transfer to Durham County Council; 􀁥 Land at Durham Tees Valley Airport and Wynyard Park – transfer to Stockton Borough Council; 􀁥 The Invista site, Wilton, and Imperial Park, Middlesbrough – transfer to Redcar and Cleveland Borough Council; 􀁥 Central Park, Darlington – transfer to Darlington Borough Council.

The transfers were intended to allow the eventual sale of the sites on the open market, obtaining the best price and avoiding a fire sale, which now looks more likely.

But, in a statement, BIS ruled: “The Government has confirmed to the RDAs that it will not be appropriate to transfer assets to local authorities, or other bodies, for deferred consideration.”

Meanwhile, the Homes and Communities Agency will take over former coalfield sites, including three in Seaham, County Durham.

One North-East has also proposed that the housing quango is the most suitable body to assume responsibility for the Middlehaven development, in Middlesbrough.

BIS has said disposals will begin within weeks.