TWO North-East councils will meet in the High Court today over a multi-million pound dispute.

Durham County Council objects to having to hand over £13.5m worth of shares in Newcastle and Teesside International airports and a waste management company to Darlington Borough Council.

It also wants to free itself of a former waste landfill site which Durham says is in Darlington's area and should be the borough's responsibility.

Durham lost both arguments before an independent arbitrator but will launch a High Court appeal against the decisions, claiming they were "plainly wrong" and based on a misinterpretation of the regulations.

The county council will ask the court to grant leave to appeal against the arbitration decisions.

It is also challenging another decision to award Darlington £1m in interest on a £2.2m payment which it was ordered to hand over.

Darlington became an independent unitary authority as part of a countrywide local government reorgansation six years ago.

Councils affected by the shake-up were supposed to agree between themselves how property and liabilities should be divided between them but when Darlington and Durham failed to reach an agreement, the wrangle went to arbitration.

Darlington council is expected to defend the decisions, arguing that Durham's interpretation of the regulations would have an unjust and unfair impact.

The hearing was expected to start yesterday but was adjourned to give the judge a chance to read legal documents in the case.