A SMALL firm embroiled in a £10m legal battle with the two key players behind a major North-East regeneration project has launched an appeal for public support.

Chilli Developments has less than 60 days to raise the £54,000 required by law to allow its case against Tees Valley Regeneration (TVR) and English Partnerships (EP) to proceed.

And last night, the Middlesbrough company put out an appeal across the North-East for support in what it believes could become a landmark case.

In the David and Goliath-type battle, Chilli has brought the case against TVR and EP, claiming both parties went back on a "lock out" (exclusivity) agreement relating to the redevelopment of five acres of the 50-acre Middlehaven site, in Middlesbrough.

In January, Chilli filed court papers for breach of contract, claiming almost £10m in loss and damages.

The matter took a fresh twist last month, when TVR and EP filed their own papers demanding that Chilli pay £325,000 to the court to prove it had the funds should it lose its case.

The pair also requested that Chilli pay outstanding costs of £40,000, relating to a previous court case last July.

Last Friday, the High Court ordered Chilli to pay £54,000 by June 13. The figure includes £20,000 as security for future legal costs.

Last night, managing director Simon Brown said: "The relatively low amount we have been requested to pay into court, compared with the hugely excessive sums requested by EP and TVR, is testament to the efforts being made to bring our case to light.

"We have less than 60 days in order to raise the funds necessary to take what could turn out to be a landmark case all the way to a full hearing."

Both EP and TVR also welcomed the court decision.

"English Partnerships were successful in both applications to the court; we are very pleased with this outcome," said a spokesman for EP.

TVR, the Government agency set up to develop Middlehaven, has always said that Chilli's £10m case is "without merit and will be developed in full".

Yesterday, a spokesman said: "Tees Valley Regeneration welcomes the decision of the court and awaits payment by the deadline determined by the court."

Chilli Developments was set up in 2003 and secured funding and planning permission to build a £50m complex of flats, offices and bars on the Middlehaven site.

In October 2004, it signed an exclusivity agreement with EP and TVR relating to the land.

It is this agreement that Chilli claims the pair went back on when talks broke down, and BioRegional Quintain was subsequently chosen as the preferred developer.

To read previous articles about Chilli Developments' legal case against EP and TVR, visit www.thenorthernecho.co.uk and click on Archive.

For more information about Chilli's claim, visit www.chilli developments.com/support