A DECISION to turn away plans to build more than 150 houses on a derelict site in Bowburn was defended at the opening of a public inquiry into the scheme.

Durham City Council planning officer Peter Herbert told the inquiry that the former Cape Asbestos factory site should be used for business and industry.

The council last year refused Hallam Land Management and Commercial Estates Group outline permission to build houses, offices and light industry units on the 30-acre plot, a decision against which the company is appealing at the inquiry, which is expected to last four days.

Richard Sagar, for Hallam, said the company could not make a profit from the £7m project, which could create 380 jobs, unless it builds some houses, because the asbestos-contaminated land will cost £2.37m to clean up.

"This site has been vacant for 17 years. It's been marketed throughout that period without any interest," Mr Sagar said.

"There has been raised time after time the prospect of intervention by either the county or the district council. What is apparent is no funding (for decontamination) has come forward."

But Mr Herbert said: "I am aware of the physical constraints of the site in terms of contamination. However, the city council is unable to accept that this is a sustainable justification for the major part of the land's use for housing.

"The site is unsuitable for housing by virtue of its divorced location relative to shops, services and facilities, and other village houses, and its close proximity to industrial activity.

"This site is allocated for employment use and is well located for that purpose by virtue of its ease of access from the A1(M) motorway and separation from existing residential properties.

"Despite the need for decontamination, the site remains better suited to employment use than for housing."

Under Hallam's plans, 70 per cent of the site would be used for houses, about one third of which would be low-cost, the inquiry heard.

Regional development agency One NorthEast, the North-East Assembly and Durham County Council have all raised concerns about Hallam's plans.