A COUNCIL chief has rejected suggestions a £650,000 film contract was awarded because the maker is a friend.

District Auditor Lynn Hunt found no illegality in Durham City Council giving local producer Brendan Quayle the contract to produce the large format film on Durham's history for the visitor centre in the city's £29m Millennium City development. She also found no evidence of corruption involving council chief executive Colin Shearsmith.

The investigation was launched after complaints that the contract was not put out to tender.

Mr Shearsmith told the council's scrutiny committee: "I have no social relationship with Brendan Quayle.

"Brendan Quayle was introduced to me at a meeting with the county council. I have nothing other than a business relationship with him.

"I did play tennis with a group of businessmen of which he was one. I have absolutely no reason to declare an interest over any relationship.''

He rejected a claim he commended Mr Quayle's scheme, saying 'he's a good chap.'

Mr Shearsmith said: "He's a good chap is not in my vocabulary''. He added that "it wouldn't be my idea of a financial appraisal.''

The committee was told the council awarded the contract to Mr Quayle because he is the only specialist in 8/70 large format films in this country - he has produced one for a visitor centre in Penrith, Cumbria.

The total cost of the scheme will be £1m because an American firm will supply and install the projection equipment.

Liberal Democrat Grenville Holland questioned why tenders were not sought and said: "Procedures have to be seen to be absolutely right otherwise its creates suspicions in the mind of the public.''

He added there had been concern from councillors on all sides about the 'incestuous relationship' between the cou-ncil and people it could be doing business with.

Mr Shearsmith said the council would deliver Millennium City, which is part-funded by the Millennium Commission, on time and in budget. He added that lessons had been learned but it was unlikely the council would ever be involved in another project of that scale