A JCB working on the site of a multi-million pound health club cut through a main power cable and plunged Darlington town centre into darkness on Tuesday afternoon.
Balfour Beatty, contractors for Bannatyne Fitness at the former Haughton Road bus depot, said yesterday: "We very much regret the incident. We can confirm it was during an operation on the site that the JCB which caused the problem went through a cable.
"This is being investigated by our own health and safety people and really at this stage we can't comment any further. We regret any inconvenience caused."
The power failure - between 12.15 and 4.50 - also affected about 20,000 homes in Darlington as well as parts of Northallerton, Richmond, Stockton and Yarm.
Town traders claim they lost hundreds of thousands of pounds through the blackout at a peak Christmas shopping period. The region's electricity network operator, NEDL, will also pursue a compensation claim.
The JCB sliced through a 132,000-volt underground cable, resulting in the majority of stores having to put up closed signs.
Binns, C&A and Marks & Spencer were the only three to have emergency lighting.
The power cut forced Morrison's Morton Park store to shut for about an hour and a half after its emergency back-up ran out.
Mr Albion Small, president of the Darlington chamber of trade and manager of the Cornmill shopping centre said: "A lot of people hung around for a bit to see if the power was going to be restored but by 2pm they had gone elsewhere.
"It has been tremendous blow and shops have lost tens of thousands of pounds. I am investigating making claims for compensation and I will be circulating information to all the Cornmill's tenants. They will be able to compare their takings with last year."
Mr Peter Newman, project engineer for NEDL, said it has had to divert supplies from elsewhere while the major cable was repaired.
"We will be making a significant claim for compensation," he added
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