BREWERY bosses have denied speculation that they plan to sell their site to a housing developer.

Castle Eden Brewery, near Peterlee, formerly owned by brewing giant Whitbread, was saved by a management and business consortium buy-out in 1998.

The man who led the buy-out, former manager Jim Kerr, recently parted company with the brewery, ending a 25-year association.

Talk of Castle Eden's closure, after more than 170 years of brewing on the site, emerged as a result of mitigation given at a court hearing against former director David Beecroft, on Thursday.

Beecroft, 41, of Richmond, North Yorkshire, was jailed for four months and given a four-year driving ban after admitting two drink-drive charges.

His solicitor, Alan Meehan, told Richmond magistrates Beecroft was dismissed as a result of the case.

He said he was faced with possibly selling his £200,000 stake in the brewery for £150,000, when it could be worth millions following an offer of £3m-£4m from a housing developer.

But the brewery, which employs 40 people, made strenuous denials yesterday that it was considering any such offer.

A spokesman said: "There is no deal being done to develop this site for housing. There is no conversation going on with any property developers.

"You would never say 'never', because beer sales could slump in two, three, four, five, or ten years' time.

"But at the moment turnover is increasing, up to £12m, with Trophy Special going into Scotland, talks taking place over bringing out a range of seasonal beers and with a brewery-related development going ahead, it is not being sold to a property developer. It is strictly business as usual, and that business is brewing."

The brewery has planning permission for a motel on the site of its sports and social club, and to alter and extend its visitor centre to include an on-site pub/restaurant.

Easington District Council said no other expressions of interest have been made relating to the site