Reassurances have been given to major global firms who are investing in a flagship North East freeport project following allegations over deals surrounding the site's ownership.

Energy giants BP and Equinor are understood to have demanded a legal guarantee that the Teesside freeport site is corruption-free.

The two companies are believed to have sought legal warranties from chiefs running Teesworks, with clauses inserted into commercial contracts.

BP declined to comment when approached by The Northern Echo.

A political row erupted over the site two weeks ago when Andy McDonald, the Labour MP for Middlesbrough, used parliamentary privilege to allege the site was subject to “industrial scale corruption”, something vehemently denied by the businessman at the centre of the row.

Tees Valley Mayor Ben Houchen said Teesworks bosses had "been able to provide assurances that his comments are completely false" and the "assurances have dispelled all investor concerns".

He has also claimed Mr McDonald's "unfounded, defamatory comments could have cost Teesside millions in investment and thousands of local jobs".

Read more: Ben Houchen responds to questions over Teesworks site

But in response, the Middlesbrough MP said Mr Houchen is "clearly in denial about the very legitimate concerns"

As the comments were made in Parliament, they, therefore, fall under parliamentary privilege and are free from any possible defamation claims.

The Northern Echo: Andy McDonald in parliament today.

Mr McDonald’s comments were made following revelations the South Tees Development Corporation (STDC) paid only £96.79 (plus VAT) for the freeholds for the future site of a wind turbine factory from the public sector. But Mr Houchen said that this statistic did not consider the “liabilities” of the site, which he claimed total minus £482 million, and a £20 million annual tax bill.

Read more: Teesworks businessmen tell Andy McDonald to go to police

Mr Houchen said: “Andy McDonald stood up in Parliament and made unfounded accusations about the work we’re doing - accusations that if he had said them outside of Parliament would result in him being sued for defamation. He has abused his parliamentary privilege, which has now resulted in investors being unduly concerned.

“His unfounded, defamatory comments could have cost Teesside millions in investment and thousands of local jobs. Thankfully, we've been able to provide assurances that his comments are completely false. Assurances that have dispelled all investor concerns.

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“Andy McDonald stood up in Parliament to try and destroy the progress we’ve made because he thinks slowing down progress helps the Labour Party politically. These are desperate claims without any regard for the damage he could cause to the area he is meant to represent.”

Mr McDonald said: “Tory Tees Valley Mayor Ben Houchen is clearly in denial about the very legitimate concerns that many, many people have about the use of eye-watering amounts of public money spent on acquiring and remediating vast swathes of industrial land, only to see it sold off for peanuts to private developers. 

“The public are entitled to full disclosure and comprehensive answers. 

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“If he thinks that anything in those articles is wrong, he should comprehensibly set out his reasons together with all the documentation so that people can judge for themselves whether or not taxpayers’ interests have been protected.”