THE collapse of a controversial sponsorship deal could lead to the establishment of a group of councillors to look into the ethics of such deals.

Businesses in Stockton were furious when food manufacturer Nestle's proposed £300,000 sponsorship for the town collapsed.

Nestle was to provide £300,000 in a three-year agreement, which would have seen the firm's name attached to council events, such as the International Riverside Festival.

The deal collapsed when a debate over the company's marketing of powdered baby milk in developing countries was arranged.

Nestle declined to attend the debate, which was sparked by protests by the Baby Milk Action group.

Today, members of Stockton Borough Council's regeneration select committee will be asked to consider setting up a working party to investigate ethical issues and sponsorship guidelines, to prevent a similar situation arising in the future.

Town centre manager Geraint Williams has already been in discussions with the Ethical Consumer Association to discover which possible sponsors could pose ethical problems.

He said: "In discussion with the association it became apparent that many national and international consumer brands carried some form of ethical, health, or political, baggage."

If it is formed, the working group would be asked to draw up guidelines for those considering sponsorship deals.