POLICE are investigating claims that documents were falsified at a crisis-hit town council.

A member of staff at Peterlee Town Council has been interviewed under caution after an allegation was made by town councillor Mandy Thompson.

The Northern Echo revealed earlier this month how members feared the authority could be “finished” by bullying and harassment allegations made by a staff member.

Cllr Thompson said the allegations were made against her after she queried aspects of the council’s finances.

Commenting on why she went to the police, the councillor said: “I have taken legal advice and they have said I have the absolute right to ask pertinent questions about issues relating to the public purse.

“Everything I have done has been at the advice of external auditors, Action Fraud or the police.

“All I have done is raise concerns that were already being raised by the public.”

Durham Constabulary confirmed it was examining allegations made by Cllr Thompson.

Detective Inspector Dave Cuthbert said: “Towards the end of the summer Cllr Thompson raised various concerns with us in relation to Peterlee Town Council, in particular an allegation certain documentation had been falsified.

“We are currently making enquiries into these issues to establish if any criminal offence has taken place, and a female member of staff from the council has been formally interviewed under caution.”

A transcript of a Peterlee Town Council meeting obtained by Echo revealed that councillors feared the authority could be left bankrupt if a staff member who had made allegations the bullying allegations took legal action against the authority.

The comments were made after a solicitor warned that the staff member could receive a six-figure settlement, with the authority facing costs of up to £60,000.

The meeting was told the the authority has no insurance to cover a legal claim.

The situation has been further complicated by complaints made by several councillors about their colleagues’ treatment of two staff members.

It is understood these complaints were not upheld by the authority's standards committee. 

In a further development, an election will be held on December 18 following the resignation of Cllr Margaret Milsom.

Nobody from the council was available to speak when the Echo called on Tuesday.

Peterlee mayor Cllr Donald Milsom declined to comment.