Dissington Garden Village application withdrawn

The development would create hundreds of affordable homes, Lugano had said

An application for a 2,000-home development, which is the source of a legal dispute between a developer and a council, has been withdrawn.

The plans for the Dissington Garden Village were set to go back before Northumberland County Council's strategic planning committee next week.

Newcastle-based Lugano is seeking £10m damages from the authority over its handling of the Ponteland proposal.

The council said it refuted claims of "political interference".

It previously said it was minded to approve the scheme but later changed its position.

The authority is under no overall control, but Lugano alleges it has acted improperly and unlawfully since local elections in May 2017 when the Conservatives were announced as the largest party.

It says the council's actions, amounting to misfeasance in public office, are causing the company a serious financial loss.

The firm's claim is against council leader Peter Jackson, cabinet member for planning John Riddle and chief executive Daljit Lally, as well as the authority itself, the Local Democracy Reporting Service said.

Council leader Peter Jackson (left), chief executive Daljit Lally (centre) and cabinet member for planning John Riddle have defended their actions

Lugano confirmed it will continue its High Court action and said it would resubmit plans for the garden village at a later date.

In a statement, it said it had "serious concern over the council's apparent reversal of position over the past months, despite the positive conclusions and recommendation reached on essentially the same evidence by Northumberland County Council planning officers previously".

The councillors and chief executive say the "allegations of bad faith made against them are vexatious and without foundation", while the council said the claim against it "is one that is bound to fail".

A council spokesman said: "We categorically refute any suggestion there was political interference in this process.

"There have been a number of material planning changes since the application was last considered by committee and, in line with other applications, it was necessary to reconsider the scheme."