A major project to transform the former Redcar Steelworks site into a manufacturing hub is under scrutiny amid allegations of corruption and cronyism.

The National Audit Office (NAO) has been urged to conduct an investigation into the Teesworks project, which has received more than £350m of Government funding and loans.

Tees Valley Combined Authority, which is running the project, has handed a 90% stake in Teesworks Ltd to two developers who are expected to profit from multi-million-pound lease agreements and half the money made from scrap metal sales.

Shadow levelling up secretary Lisa Nandy has called for a full investigation while Tees Valley Mayor Ben Houchen has also requested a full Parliamentary inquiry to clear his name of any wrongdoing.

The NAO has previously reviewed the business case for the project, but cannot conduct a detailed audit of the accounts without approval from local government secretary Michael Gove.

Mayor Houchen, who is leading the redevelopment, has written to the NAO to request an investigation because he said he had ‘nothing to hide'.