FOUR borough councils have been cleared of wrongdoing over the dissolution of a race watchdog.

The Cleveland Racial Equality Council (REC) folded in 1999 when the local authorities of Middlesbrough, Stockton, Redcar and Cleveland, and Hartlepool withdrew funding.

The councils, which had each contributed a £6,000 subsidy, were unhappy with the achievements of the organisation.

Their confidence was undermined further in 1997, when an industrial tribunal ruled that the REC discriminated against a white job applicant, Pete Widlinski. He was awarded £27,500 in compensation.

Supporters of the REC made allegations of maladministration to Local Government Ombudsman, Patricia Thomas.

In a statement to be announced today, she has found that the four acted impartially in deciding to stop funding.

Nor was there maladministration in the way appointments were made to a temporary steering committee, set up by the Commission for Racial Equality to manage the organisation.

She also found no evidence to support an allegation that the councils, through their representatives on the steering committee, prevented elections taking place or improperly took part in the decision to close the organisation. A spokesman for the four councils said: "We are very pleased that our actions have been fully vindicated."

Two unnamed councillors are criticised in the report. One from Middlesbrough was "unwise'' to accept a nomination to the REC's steering committee, while another, from Hartlepool, "showed lack of judgement''.

Dennis Lane, who complained to the ombudsman, said he believed crucial points had been missed, and the ombudsman should have found in favour of the complainants.

A spokesman for the Commission accepted there had been mistakes, which were previously highlighted by the Parliamentary ombudsman.