A BATTLE is brewing over the future of a multi-million- pound fund earmarked for a now cancelled wind turbine project.

City leaders are to lobby the Government in a bid to ensure £5m originally handed to the region to help Clipper Windpower create manufacturing jobs is not clawed back by ministers.

The Journal revealed last week how the firm’s American parent company UTC has scrapped plans to design and build the next generation of offshore wind turbines in the region following a series of delays.

Clipper had hoped to have started turbine production this year at a purpose-built factory on the banks of the Tyne.

As part of that plan Clipper was told £5m had been set aside by development agency One North East to help the firm in its plans to create more than 1,000 jobs, both at the site and in the wider supply chain.

With those plans now dashed, it is feared the region will lose out on the unspent cash which could be used to support an increasingly battered renewable energy industry.

As well as the financial problems hitting Clipper, the North East was last week warned of a Scottish threat as Alex Salmond looks to take investment north of the border.

His Scottish National Party is putting pressure on the Treasury to allow it to offer lower corporate tax rates, a move offshore industry experts say could undermine the North East.