THE boss of a failed train festival sexually discriminated against two of his female employees, a tribunal heard.

Journalist Tony Baker said the former chairman of Rail 2000, David Champion, had been "demeaning and undermining to female staff".

Details also emerged of bitter arguments between Mr Baker, who was employed to publicise Rail 2000's failed railway extravaganza, and Mr Champion in the months before financial difficulties forced the organisation into liquidation.

Ailsa MacKenzie, 28, originally of Newcastle and now of Glasgow, and Janice Armstrong, 39, of Elswick, Newcastle, alleged at the Newcastle employment tribunal yesterday that they were treated differently to men by Mr Champion and had to endure lewd comments.

Mr Champion, 52, of Morpeth, Northumberland, who was questioned by Miss MacKenzie at the tribunal, countered all the allegations. He said he had treated men and women the same and said any "fruity" comments he made was in the spirit of on-going banter which was not directed at any individual.

He also claimed the women had themselves been crude. He said to Miss MacKenzie: "You called a woman in a neighbouring office a dyke and another person a scumbag."

Earlier, a dispute had emerged between Mr Champion, who has now retired, and Mr Baker about what had happened to company equipment in the last weeks of the company, but that was dismissed as not relevant by tribunal chairman Mr Nicholas Garside.

Rail 2000 was set up primarily to organise the Millennium Cavalcade of Steam event on the site of the first ever passenger railway service between Darlington and Stockton but was cancelled after a major investor pulled out.

Miss MacKenzie and Mrs Armstrong have both been employed elsewhere since they were fired in November 1999. The official reason for their dismissal was that they had refused to cooperate with internal investigations.

The tribunal continues.