A QUESTION marks hangs over the future regeneration of an unemployment-hit town after the organisation coordinating the project went bust.

South Bank Community Forum has gone into liquidation, with the loss of 21 jobs, while owing Redcar and Cleveland Borough Council more than £200,000.

Kim Drury, South Bank's citizen of the year, said: "The people of South Bank feel gutted. They are the losers again.''

She is demanding a public inquiry into the financial dealings which have seen two officers suspended, with one of them, chief executive Barbara Whitby, admitted to hospital after a suspected heart attack.

Mrs Drury said: "There should be a public inquiry. It's public money which has been spent, and people here not only want to know what has happened, they have a right to know."

Liquidator John Taylor, of insolvency specialists John B Taylor and Company, of Yarm, is arranging a meeting with council representatives.

A spokesman for the firm said it was hoped that "viable projects will continue and as many staff as possible kept on".

Jackie Goult, chairwoman of the forum's board of directors, said the decision to go into liquidation was made with "great sadness".

She said: "We can only express our sorrow for the staff who worked for the board and to the wider community - but we were faced with a set of circumstances which provided us with no alternative but to wind up our activities."

Councillor Dave Walsh, leader of Redcar and Cleveland council, said: "We are extremely sorry that the forum has failed.

"We are now taking action to protect any further financial interests of the council, and to make sure that the company's regeneration schemes which have been set up to support South Bank can continue.

"It was unclear that the company had severe financial problems until a few days ago. Up to then, their accounts and audit had shown they were still solvent. Now, with the full details available, we had to cease payment forthwith.''

Redcar and Cleveland council had provided cash for the forum, but expected to get the money back when the forum received Single Regeneration Board and European money.