COUNCILLORS have written off a rates debt owed by a troubled North-East steelworks.

Weardale Steel, in Wolsingham, should have paid £41,384.10 in business rates for the first half of last year to cover the period until it went into administration on October 3.

Wear Valley District Council collects the money on behalf of the Government through a national non-domestic rate scheme.

Members of the authority's central resources committee agreed to write off the payment on the advice of director Gary Ridley.

He said: "Although the administrators may try and sell the company as a going concern, this may take some time and at this stage we may not receive any dividend as we are not preferential creditors."

Weardale Steel's administrators, Poppleton and Appleby, of Sheffield, are said to be close to agreeing a deal with a potential buyer.

In the meantime, 31 workers are employed on the site by Bonds Foundry, in Tow Law, to complete outstanding orders worth £1.4m.

The company collapsed with the loss of 85 jobs shortly after a Midlands company Eastwood Industries bought it for £1m from Langham Industries, of Dorset.

Department of Trade and Industry officials are investigating the takeover. The council's leader, Olive Brown, said: "It is unfortunate that we have had to write off this money which is owed to the Government.

"We are concerned about jobs and hope there will be some news soon.