A COUNCIL chief has publicly rejected suggestions that a £650,000 film contract was awarded because the maker is a friend.

An inquiry by district auditor Lynn Hunt found no illegality in the decision by Durham City Council to award local producer Brendan Quayle the contract to produce the large format film on Durham's history, to be shown in the visitor centre at the city's £29m Millennium City development.

She also found no evidence of corruption involving council chief executive Colin Shearsmith.

The investigation was launched following complaints that the contract was not put out to tender.

Mr Shearsmith told the council's scrutiny committee last night: "I have no social relationship with Brendan Quayle.

"Mr Quayle was introduced to me at a meeting with the county council. I have nothing other than a business relationship with him.

"I did play tennis with a group of businessmen, of which he was one. I have absolutely no reason declare an interest over any relationship.''

He rejected a claim he commended Mr Quayle's scheme, by saying "he's a good chap".

Mr Shearsmith said: "'He's a good chap' is not in my vocabulary and it wouldn't be my idea of a financial appraisal.''

The committee was told the council awarded the contract to Mr Quayle because he is the only specialist in 8/70 large format films in this country. He has produced one for a visitor centre in Penrith, Cumbria.

The total cost of the scheme will be £1m, as an American firm will supply and install the projection equipment.

Liberal Democrat Grenville Holland questioned why tenders were not sought and said: "Procedures have to be seen to be absolutely right, otherwise its creates suspicions in the mind of the public."

He said there had been concern from councillors on all sides about the "incestuous relationship" between the council and people it could be doing business with.

Mr Shearsmith said the council would deliver Millennium City, which is part-funded by the Millennium Commission, on time and within budget.

He said lessons had been learned, but it was unlikely the council would ever be involved in another project of that scale