A DEFUNCT quango at the centre of a missing millions investigation was an accident waiting to happen, it is claimed.

Social sciences expert Tim Blackman said that the Teesside Development Corporation (TDC), wound up four years ago, found itself walking a tightrope between the ethos of public accountability and the high stakes of property speculation.

Professor Blackman, who works at the University of Teesside, in Middlesbrough, was commenting on the findings of a damning National Audit Office report into the controversial development agency.

The office's inquiries have uncovered a catalogue of mismanagement, including the breaking of Government rules on financial dealings.

The report reveals that £23m is missing from TDC accounts - which could rise to as much as £34m.

It also details how the corporation committed multi-million pound funding for projects without getting the necessary Department of Environment approval.

It shows how the TDC, which was responsible for such projects as the Tees Barrage, Teesside Retail Park and Hartlepool Marina, waded into financial difficulties in the mid-1990s, and the desperate measures it took to juggle its books.

Prof Blackman said: "A number of development corporations were more socially orientated and, consequently, worked more closely with communities.

"Property-led regeneration often does not work."

He said corporations had to work with the community, linking in with training and housing - a joined-up approach which the TDC did not have.

"I guess they were living in a sort of twilight world between ethically-led public services and a commercial approach," he said. "They were expected to be gung-ho. They were set up because local authorities were seen to be slow and bureaucratic.

"They were parachuted in, imposed on regions and told to get on with it and, implicit with that, do what was necessary."

Frank Cook, Labour MP for North Stockton, said of the report: "This is such a wide-ranging and devastating condemnation of the way the TDC was managed and supervised that it is hard to know where to start."

Former TDC chief executive Duncan Hall and Sir Richard Mottram, who was the top civil servant of the Department of the Environment - now the Department of Environment, Transport and the Regions - will be cross-examined at a special hearing of the House of Commons' Public Accounts Committee on Monday.