PLANS to build a Tesco superstore in the centre of a North-East town took a dramatic twist last night when there were claims a rival supermarket scheme had been "kept secret".

The Northern Echo has discovered that earlier this year, Asda presented its ideas to develop almost a quarter of Darlington town centre. But it was ruled out by the borough council - without consulting members or the public.

Last night, councillors threatened to refer Darlington Borough Council to the district auditors, who could investigate any alleged financial mismanagement.

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The council has been negotiating with Tesco since 2003. The supermarket wants to demolish the town hall, build a superstore and 130 flats on the site. In return, it will build and fund a £14m town hall nearby.

John Buxton, the council's director of development and the environment, said he had a speculative meeting with Asda representatives earlier this year. He said: "We weren't convinced they could come forward with the proposal in the timescale. Tesco had already done a lot of work.

"Our professional advice was that we wouldn't get a better deal than the one we had on the table. Our consultant's advice was that we didn't need to put this out to the market place now there was another supermarket interested."

In a letter to Mr Buxton after the meeting, dated March 21, Barney Harle, of Asda, wrote: "We trust that our interest in this site will be registered and communicated to the members of the council should this site come forward for development."

Last night, councillors said they had not been told of Asda's interest.

Councillor Tony Richmond, leader of the Tory group, said: "If Asda communicated to the town hall in March 2006, it's disgraceful that this information has been kept secret from both councillors and the public."

He added: "Due to the council's financial involvement in the Tesco proposal and the non-disclosure of Asda's interest, it is increasingly likely that the district auditors will be asked by the Conservatives to look into this."

Councillor Martin Swainston, for the Liberal Democrats, said: "My view is that a freeze should be put on this development."

Asda spokesman Simon Leonard said: "We wanted to make our intention quite clear, we wanted to make sure there was a level playing field and everyone had the same chance."

Mr Buxton said: "At the moment there is no decision, we are putting offers like Asda on hold." He was adamant no other supermarkets had expressed an interest in the site.