DEVELOPMENT agency One North East last night said it would not seek to claw back public money that was paid to support a deal between a North-East airport and airline bmibaby.

The agency confirmed it had paid £425,000 to Durham Tees Valley Airport (DTVA) when a second contract was signed between the airport and bmibaby in 2005.

The deal collapsed a year later when bmibaby pulled its operations, leading the airport to launch a legal claim for £12m worth of damages.

That claim was thrown out by the High Court this week after a judge said an earlier contract between the two parties obliging the airline to operate two aircraft from DTVA until April 2014 was too vague to be legally enforceable.

Questions have been asked over the amount of taxpayers’ money spent in supporting efforts by DTVA to keep bmibaby at the airport.

Last night, a spokesman for One North East said: “DTVA was awarded £425,000 by One North East as part of destination marketing activity for the area.

“We are assured by the airport that the conditions of this payment have been met as the money was appropriately invested to promote the area as a tourist and business destination.

“On the basis of this assurance, we see no grounds to recover this payment.”

The spokesman said that no money had been paid directly from One North East to bmibaby during the course of the airline’s relationship with the airport.

Yesterday, Stockton North MP Frank Cook said he intended to ask the Government spending watchdog, the National Audit Office, to look into the deal and any public funding.

DTVA’s efforts to retain bmibaby flights led to a wave of investment in the airport, which included improvements to the main passenger terminal, a £2m access road, and a £500,000 shuttle bus link.

Following the outcome of the court case, airport owner Peel now faces a £1m legal bill.

However, it is thought to be confident of winning an appeal after Judge Mr Justice Davis said that he was sympathetic to aspects of its application.

Peel made no further comment last night.

A spokesman for bmibaby said: “Since DTVA has indicated that it intends to appeal we do not consider it appropriate to comment any further on the matter at this time.

“However, for clarity, bmibaby services were operational [at the airport] for nearly three years.”

Six councils – Darlington, Stockton, Middlesbrough, Redcar, Hartlepool and Durham – retain a 13 per cent minority stake in the airport.

Stockton Borough Council confirmed they would not carry any liability for the legal costs from the case.