STOCKTON has lost a £330,000 sponsorship deal in a row over baby milk.

Nestl pulled out after refusing to attend a meeting which could have revived controversy about baby milk marketing. The company said it withdrew because it was only to be allowed a 20-minute slot which it felt was insufficient to do justice to the complex issues involved.

But campaigners said the firm was afraid of embarrassment in facing questions about ethics.

The upshot is that the council now has to go back to the drawing board in developing town centre marketing backed by business sponsorship.

A cabinet meeting was to have been held on Monday to consider Nestle's involvement, but this has been cancelled.

Council leader, Coun Bob Gibson, said: "We always expected teething problems, but it is important that any proposal is fully discussed and agreed by all parties as mutually beneficial."

Councillors were told by legal and administrative services director, Mr David Bond, that Nestl decided to pull out after being invited to share a platform at the meeting with the campaign group, Baby Milk Action.

"This was to avoid an open debate which it felt would have led to controversy," he said. "It would not be possible for the council to make an informed decision without this meeting."

The town centre management executive and partners will now be asked to help in developing guidelines for future sponsorship approaches.

The council invited Baby Milk Action to present evidence to back the group's claim that "Nestle aggressively markets breast milk substitutes, violating international standards and contributing to the unnecessary death of and suffering of infants."

Stockton campaign members expressed regret that the town had lost the sponsorship deal.

Mr Mike Brady, of Baby Milk Action, was to have presented evidence at the meeting. He said: "We appreciate that Stockton council was prepared to give both sides a chance to put their case.

"Clearly Nestl is afraid of the embarrassment it would suffer from having its records scrutinised."

Coun Gibson said: "Naturally, we are disappointed that the company decided to withdraw the sponsorship proposal, but we appreciate it made a commercial decision."

Discussions would now be held with town centre partners for guidelines on what forms of sponsorship would be acceptable.

A spokesman for Nestl said the firm had been impressed with the project's vision and enthusiasm.

"We knew there might be some critical reaction from UK-based groups and in all our sponsorship projects we try to explain as much as possible about the company and our products," he said.

"We have more than 500 factories world-wide and a long-term commitment to the developing world where our people live and work.

"The sponsorship has been caught up in a complex procedure which could cause controversy within the council. We had no wish for that to happen.

"We were also concerned that a subject which has been discussed in the UK for 27 years without consensus could be covered adequately in a 20-minute presentation.

"We regret withdrawing, and know how hard members of the Stockton team have worked to pull in investors. This is no easy task, given the current economic conditions."