A BOLD plan to revive a North-East airport is in danger of collapse after the Government rejected its bid for regeneration cash, The Northern Echo can reveal.

Ailing Durham Tees Valley Airport (DTV) applied for cash from the Regional Growth Fund (RGF) to build a massive freight operation on land south of the airport runway.

It was hoped the £5.9m scheme, which would take ten years to complete and create up to 1,500 jobs, could breathe new life into the airport, which was close to going out of business last year amid falling passenger numbers.

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Details of the successful RGF applicants will be revealed tomorrow, but The Northern Echo understands that the bid by the airport’s owner, Peel Holdings, is not on the final list. The blow will again prompt questions about the future of one of the region’s key transport links.

The plan to launch a freight operation at DTV was hailed by local MPs when it was announced in June. The bid for Government cash received strong backing from Tees Valley Unlimited Local Enterprise Partnership, the Homes and Communities Agency, together with Stockton and Darlington borough councils.

Neil Schneider, chief executive of Stockton Borough Council, the lead authority in the six councils which are minority shareholders in the airport, said: “We have received no notification hat the airport’s application to the Regional Grown Fund has been unsuccessful,” he said.

“Indeed, our most recent information was that the bid had made it past the initial shortlist.”

A number of previous schemes aimed at developing the south side of the airport failed to materialise.

They included a project to create one of the biggest cargo-handling centres in Europe, which was first approved in 1999, but abandoned three years later.

The planned £110m Skylink International Business Park, announced four years ago, stalled because of no funding.

Peel Holdings came out fighting in March with a new marketing campaign backed by operator KLM, which runs three daily services to Amsterdam.

Airport bosses have not given up hope of boosting passenger numbers too, despite seeing them fall from a high of nearly one million in 2006 to about 200,000 this year.

However, recent talks with airlines have failed to bring any new routes to the region.

The airport is due to hold a board meeting tomorrow, where the latest developments will be discussed.