Plans for an independent investigation into the Teesworks site "fall way short of what is needed," a North East Labour MP has said.

Middlesbrough MP Andy McDonald and Stockton North MP Alex Cunningham have both called on Government to assign the National Audit Office (NAO) the responsibility of carrying out an independent inquiry into the controversial site.

This comes after a letter shared by Tees Valley Mayor Ben Houchen, sent by Levelling Up Secretary Michael Gove, confirmed an investigation into the site would be carried out by an independent panel.

But the Labour MPs criticised the decision to not involve the NAO in the investigation - while Mr McDonald said the Government had "bottled" the process.

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He said: "Michael Gove’s announcement of an independent inquiry into the South Tees Development Corporation and Teesworks falls way short of what is needed and what was demanded, which was an inquiry conducted by the National Audit Office, independent of government. 

"Instead, it is Michael Gove who will commission an “independent review” and it is he who will appoint the panel of people to investigate Teesworks and the STDC. Only an independent inquiry by the NAO will suffice. 

"The public are entitled to hold this Prime Minister and his ministers to his own words when he promised a government characterised by integrity, professionalism and accountability. 

"Labour has asked for that NAO inquiry. Ben Houchen has also said a NAO inquiry should happen, but the government has bottled it."

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Mr Cunningham questioned the wisdom of the panel being assembled by a Conservative minister - saying it could "never be viewed as independent".

He added: “Any panel set up by a Tory Government Minister to look into the way a Tory Mayor conducts his business can by its very nature never be viewed as independent and it is naïve of Michael Gove – one of whose ministerial colleagues accepted a donation from one of the businessmen involved in TeesWorks - to think otherwise. 

“He says he has made an exceptional decision to set up an investigative panel. 

"What he and the Prime Minister need to do is enable the National Audit Office carry out a review into what has happened at TeesWorks – to follow the evidence and report to Parliament, not the Government.

“They also need to withdraw their refusal to allow the Business and Trade Select Committee to carry out their enquiry – and call witnesses to account.

“Mr Gove claims there is no evidence of wrongdoing by the Tees Mayor.  That may well be the case – perhaps his decisions to hand over 90 per cent of the public assets to private businessmen have simply been badly misjudged – but he and the rest of us deserve an NAO enquiry so the matter can be laid to rest.”   

In his letter to Mr Houchen, Mr Gove said: “I have considered calls for such an investigation to be led by the National Audit Office (NAO). It is not, however, the NAO’s role to audit or examine individual local government bodies and its powers would not normally be used for that purpose.

“I do not think it would be appropriate to expand so significantly the role of the NAO by asking them to lead this inquiry. Nonetheless, I would welcome the NAO updating its review of Government’s funding arrangements for STDC.

“Given the importance to you and to Teesside of addressing this matter, I have taken the exceptional decision to support the commissioning of an independent review to consider the specific allegations made and Tees Valley Combined Authority’s oversight of the STDC and Teesworks joint venture.

“As set out above, this is not because I am advised that there is evidence to recommend such a review, but to answer your request of 16 May. I will appoint a Panel, in line with established practice, to undertake an independent, external assurance review.

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“Since serious allegations of corruption, wrongdoing and illegality have been made, I will ask the Panel to address these accusations directly, and to report on the governance arrangements at STDC including how decisions are made, as well as looking at the value achieved for the investment of public money on the site.

“I will publish detailed terms of reference shortly. I will invite any interested party, including Members of Parliament, to make representations to the Panel as part of their evidence gathering.

"The report and any recommendations will of course be published in line with usual practice.”