Auditors check Prescott housing deal

A TEAM of Government auditors delved into the controversial housing deal involving the son of John Prescott yesterday as police arrested a man in connection with an alleged "vendetta" against the Deputy Prime Minister.

Three senior audit officials from the Department of the Environment, Transport and the Regions questioned the head of a housing trust that sold 25 homes to Wyke Developments which employs Mr Prescott`s 34-year- old son, Jonathan, for just pounds 5,000 each. But after his grilling, Stephen Brindley, chief executive of the North Hull Housing Action Trust, said: "This deal was completely above board and we have absolutely nothing to hide."

Hours earlier, detectives in Hull questioned and released on police bail one of two men who had "sought sanctuary" from the media after they were identified as two self-styled researchers who had been offering material about Mr Prescott senior to the media. The arrested man, Ian Newton, 42, a computer expert, of east Hull, was questioned in connection with an alleged burglary and the theft of some papers from a city-centre office.

Yesterday's events raised the temperature in an acrimonious row between disaffected elements of the local Labour Party and Mr Prescott senior. Some Prescott supporters believe the "researchers" were hired to dig dirt on him before the men turned freelance. One of those openly accused of hiring them, suspended councillor Tony Fee, said: "That's rubbish. As soon as you ask any questions in this town, someone accuses you of something."

It was Mr Fee who called for an inquiry two weeks ago into the sale of 25 houses on a run-down Hull estate to Wyke Developments. The houses are to be transferred to Wyke Property Services Ltd, of which Mr Prescott junior has a 20 per cent stake.

The homes were sold by the North Hull Housing Action Trust whose vice chairman is John Black, a close friend of the Prescott family, who is being investigated by police over pounds 42,000 in expenses claimed while he was Lord Mayor.

However, the deal was approved by regional officials of the DoETR in Leeds after a tendering process which saw Wyke emerge as highest bidders who were prepared to re-let the houses at the lowest rents.

"One bid was for pounds 1 per house and two housing associations actually asked us for money to take the properties off our hands - one wanted pounds 7,000 per house and the other wanted pounds 11,000," said Mr Brindley, the housing trust chief executive.

Mr Brindley said each house needed approximately pounds 10,000 in internal renovations. Local estimates put the value of the homes after renovation at about pounds 25,000. However, Mr Brindley said that under the deal, Wyke have to rent the properties at about pounds 45-50 per week for at least 10 years before they can be sold on.

The audit team left Hull last night with copies of dozens of documents and records of interviews. They hope to report to Mr Prescott senior- by tomorrow.