THE City of York Council has been warned that a complaint could be made to the Audit Commission if it backs the controversial Derwenthorpe scheme.

The warning has come from Ryedale MP John Greenway, as the authority prepares to consider the Joseph Rowntree Foundation (JRF) proposal for a 540-home model village at a special planning meeting on January 31.

Councillors are being urged by officers to approve the application - but if they do, it would then have to be referred to the Government, which could call it in for a public inquiry.

The development, on York's outskirts at Osbaldwick, has sparked huge opposition, particularly from residents living on access routes into the site, such as Temple Avenue, Meadlands and in Osbaldwick.

One leading opponent, Mark Warters, of Osbaldwick, wrote to Mr Greenway to suggest that the council's decision to select the JRF to develop the site did not represent best value for money for council taxpayers.

Mr Greenway wrote back, saying this was an interesting suggestion which he intended to pursue, and he had written to the chief executive to inform him of the "potential of a complaint" to the Audit Commission.

He said that "what we would all like to achieve is for the council to go back to the drawing board and reconsider the whole project".

But he said: "Should the council determine to press ahead and make a formal decision to seek approval for the scheme from the Secretary of State, then the case for the Audit Commission to intervene would be all the stronger."

The MP reiterated his view that there should also be a public inquiry if the council does back the scheme.

A council spokeswoman said: "The decision to work in partnership with the Joseph Rowntree Foundation was taken by the council in June 1999.

"The foundation is a valued developer partner with City of York Council, who have local and national standing and who are also able to contribute from their own resources to add value to the project.

"It has always been the intention that by working with one main registered social landlord we would achieve the aspirations for a cohesive and sustainable community rather than seeking to develop the land in a piecemeal fashion as has been done in other parts of the city.

"In relation to the land value, there was a comprehensive evaluation of the land value carried out by external consultants, and this was used as the basis for the financial elements of the partnership agreement.

"It has also been established policy and practice in City of York Council for many years to use the council's land assets to facilitate the development of affordable housing, subject to the Secretary of State's approval."

Updated: 09:09 Monday, January 24, 2005