FINANCIAL watchdogs have rapped a cash-strapped local authority after it sold a former prime minister’s stately home for more than £1m less than one buyer was prepared to pay.

Surrounded by 25 acres of parkland with its own clock tower, billiards room, stables and servants’ quarters, Windlestone Hall in County Durham was expected to attract offers of well over £1m.

But six years after it first went on the market, the birthplace of former prime minister Sir Anthony Eden sold for just a fraction of its original valuation at £241,000.

In a report published yesterday, auditors said Durham County Council had displayed “weaknesses” in its methods of marketing the Grade II* listed Windlestone Hall, near Rushyford, Sedgefield.

The authority was criticised for failure to obtain an independent valuation of the property “in the interests of transparency”.

But the audit commission also said there was no evidence that the council would have received any more than it did for the sale of the property.

County councillors John Shuttleworth and Reg Ord contacted the Audit Commission – whose remit is to protect the public purse – to ask it to hold a “full and public investigation” into the sale of the stately home for £241,000.

Coun Shuttleworth said: “This is a stately home which was sold for the price of a suburban semi by a county council which is so hard up it is having to cut vital services. It beggars belief. The county council is nothing more than a circus run by clowns.”

Seven years ago the council accepted a conditional £2.3m offer from a housing group, Randall Orchard Whitelam Homes, which intended to build luxury flats within the hall’s grounds.

The offer, which was subject to planning permission, was later revised down to £1.5m due to planning restrictions and structural damage to the hall.

The 19th Century hall was first built in 1835, incorporating a section of the rear wing which dated back to 1750.

Designed by architect Ignatius Bonomi and built for Robert Thompson Eden, the property was the 1897 birthplace of the former Tory prime minister Sir Anthony Eden who led the country between 1955 and 1957.

His family sold the hall in the 1920s and it was later used as a prisoner of war camp before becoming a council-owned school for youngsters with emotional and behavioural difficulties.

A report from independent auditors Mazars, which will be discussed by Durham County Council’s audit committee next Thursday, said: “The legislation requires the council to obtain the best valuation for a piece of land that it can reasonably obtain.

“The council’s approach means there is limited independent evidence to substantiate whether £241,000 represented best consideration as the offer was not submitted as part of a marketing exercise. It would have been prudent of the council to obtain a valuation from an independent source in the interests of transparency.

“This would have strengthened the decision-making process.”

But Stuart Timmiss, head of planning and assets at Durham County Council, said: “We remain absolutely true to our initial statement that; given the condition of the building, the state of the market and the very significant maintenance costs being incurred by the council the sale did represent best value for money for tax payers.

“This was also the only offer, including those received in 2006, which proposed retaining the house solely as a domestic residence and therefore very clearly the best possible conservation outcome for the Grade II* listed building.”