Plans for a part-privately funded community college for Teesside are in doubt after council bosses pulled back from a deal involving a troubled London Underground contractor.

Freebrough Community College is currently based on three sites at Loftus, Brotton and Skelton.

Redcar and Cleveland Borough Council want to build a new £13m single site using the controversial Private Finance Initiative (PFI).

But council bosses now say building and engineering company Amey is no longer the project's preferred partner.

I am still hopeful that we can arrange the financing to build the college

Ian Jeffrey, Redcar & Cleveland Council

Amey was part of a consortium involved in the part-privatisation of the London Underground.

But in November is revealed serious financial problems which it said may mean it selling off many of its assets.

Now Redcar and Cleveland councillors are hoping an alternative deal may rescue the PFI plan for Freebrough.

Lead member for Lifelong Learning and Leisure, Councillor Ian Jeffrey, said: "Amey is not now the preferred bidder as a private sector partner.

"Their original offer is not quite as attractive as first seemed.

Second setback

"Negotiations are now being undertaken with the second preferred bidder and a decision will hopefully be made on 12 December."

This is the second major setback for the east Cleveland project.

Councillors originally wanted to create a city academy, but were stunned when the major sponsor pulled out.

Mr Jeffrey added: "I am still hopeful that we can arrange the financing for the deal that we had with Amey to build the college.

"But people need to be reassured the council is committed to ensuring that we do get a single site for east Cleveland with or without a private sector partner."

Mr Jeffrey admitted that it may now be 2005 before the project is completed.