LOCAL authorities yesterday sold their controlling interest in the region's second biggest airport - paving the way for a £20m investment programme.

The five North-East councils which owned Teesside Airport sold 75 per cent of their shares to a Manchester-based company for a figure believed to be about £500,000.

Peel Airports Limited has acquired the majority shareholding and has pledged a massive transformation in facilities, choice of services and a rapid increase in business.

However, as revealed in The Northern Echo last month, the authorities are unlikely to have made a huge profit as the cost of transferring the airport could have been as high as £500,000.

Following the sale, Redcar and Cleveland, Hartlepool, Middlesbrough, Stockton and Darlington councils will retain a 25 per cent share in the airport, eventually falling to 12 per cent.

Although financial details were kept under wraps yesterday, officials insist the deal is the best that could have been struck - and is in the long-term interests of taxpayers and the regional economy.

Without the private sector investment, they are adamant that Teesside Airport, near Darlington, would have been forced to close. It had recently been struggling to compete with Newcastle.

Managing director Hugh Lang insisted yesterday that the partnership deal was "the beginning of what I believe will be one of the most exciting and challenging periods in the airport's history".

Peel will work with regeneration agency One NorthEast to create a 400,000 sq ft business park, as well as refurbishing the main terminal and enhancing facilities over the next five years.

It is hoped that passenger numbers will double to 1.5m a year - and signing a deal with a low-cost airline could be crucial to this.

Mr Lang said: "The airport will have the resources to deliver the quality of terminal and other facilities which are required in today's market place to attract new business."

Peel Airports chairman, Robert Hough, said: "We look forward to developing this relationship and delivering growth to Teesside Airport.

"Our attention now turns to improving air services and the passenger terminal."