THE latest setback to a £220m partnership deal for East Cleveland has been criticised.

Redcar and Cleveland Council this week announced that Amey was no longer the preferred bidder in a massive development programme.

That means it is back to the drawing board for tendering for a strategic partnership which would, among other major projects, provide a new £45m school.

The council's second choice, Liberata, will be back in the running and Amey must make a second bid.

The council stressed that the decision was not based on national speculation about Amey's finances. Instead, it said the problem was caused by significant features of the original Amey bid having been unachievable.

The deal had held out the prospect of a £45m Public Finance Initiative bid for a new 1,100-place building for Freebrough Community College, which at present has split sites at Skelton, Loftus and Brotton. The preferred new location is Skelton.

There were also plans for a new town hall, business centre, information technology facilities and 600 new jobs.

Amey would have provided essential council services but also been able to tender for other council contracts elsewhere.

Coun Steve Kay (Independent) was particularly concerned about the potential setback to a new Freebrough College.

"The people's hopes were built up over a new city academy which never happened and now there's these difficulties with a new school. Each time there seems to be difficulties and delays. The new school must go through by hook or by crook."

Recar and Cleveland Council leader Coun David Walsh, said the council had to be sure it had the right deal.

"We must ensure that any contract we enter into is consistent with the council's obligations to secure best value and the step we have taken in drawing the reserve bidder back into the process is an essential part of achieving that," he added.

Chief executive Colin Moore added: "This is a very big contract and we have to take the time to get it right.