HAROLD Macmillan questioned the wisdom of privatisation, saying it was like selling the family silver.

Looking at the fate of our railways in the private sector, the former Tory Prime Minister perhaps had a point.

But in contrast, other enterprises taken out of state control have been able to produce better and often cheaper public services.

The case for the involvement of the private sector in Teesside International Airport is rock solid.

With London's airports reaching near capacity there is a growing demand for flights from regional airports, stimulated by the emergence of the no-frills carriers.

But small airports like Teesside are unable to capitalise of this potential growth without investment.

The local authorities which own Teesside Airport have neither the appropriate skills or access to funds to support the investment programme it needs to survive in such a competitive climate.

In opting for partnership with a developer of Peel's standing, the councils appear to have chosen wisely. It is a company with a fine track record in retailing and, crucially, in turning the airport at Liverpool into one of the fastest growing in Europe and a hub of the no-frills boom.

Peel's promise to invest £20m at Teesside will not only secure the future of the airport, but will strengthen a vital component of the region's economic infrastructure.

However, there may be some consternation at the low price Peel is paying for the opportunity to develop the airport. A figure of £500,000 appears a small amount for a large public asset.

But it is a fact that the days of publicly-owned enterprises are numbered and that without private sector involvement, Teesside Airport may struggle to survive in the medium to long term. Peel is buying the potential of the airport, rather than the limited facilities it has at the moment, and that is reflected in the low purchase price.

Only time will tell whether the local authorities could have struck a better deal, and offered a more value-for-money solution for both council tax payers and the travelling public.