IT seems that York council welcome the critical Audit Commission report into the proposed Derwenthorpe development at Osbaldwick (Must do better, November 4).

But all the lights have not yet turned green for Councillor Galloway and his fellow Liberal Democrats and there is no guarantee that the proceeds from the sale of the land may bankroll them with another term in office.

The Audit Commission inquiry has raised serious doubts over the legality of the agreement between the council and the Joseph Rowntree Foundation because the site was not put out to public tender and may contravene EU competition rules. But the District Auditor chose not to use his statutory powers.

Had he declared the agreement illegal, the consequences for the foundation and the council would have been dire. For the council, judging by the pathetic and derisory sums of money they will receive from the sale of the Barbican Centre, their other assets must surely be worthless and it would have found itself mired in debt.

For the Joseph Rowntree Foundation, trying to develop the Derwenthorpe site was always a gamble because of the limitations of the site in terms of traffic congestion, flooding, ecology and questions over the green belt status of the land.

Previously, the agreement between the council and the foundation shared the cost of those risks, but if the agreement is shown to be illegal then it is voidable and unenforceable and the foundation will bear the full costs but have nothing to show for it.

Both parties should be aware that in these matters, where public land is being sold for less than market value, it is the Deputy Prime Minister John Prescott who has the final say, not the Audit Commission, and he must exercise his judgement carefully for his decision is open to judicial review.

A Wilson,

Grasmere Drive,

York.

Updated: 10:32 Tuesday, November 15, 2005