A NORTH-EAST town council could be "finished" by bullying and harassment allegations, councillors fear.

The transcript of a Peterlee Town Council meeting obtained by The Northern Echo reveals that councillors fear the authority could be left bankrupt amid claims and counter-claims from members and staff.

It is understood the clerk, Jane Russell, has submitted a complaint of bullying and harassment against several councillors.

Sources say the relationship between the clerk and several senior Labour members deteriorated after Ms Russell attempted to implement major changes to the way the authority was run.

According to the transcript of a meeting on September 8, one councillor, Mandy Thompson, then made a counter-complaint of bullying against Ms Russell and deputy clerk, Kay Tweddle.

The authority has sought legal advice on the implications of Ms Russell, who is currently off work, suing the authority for unfair dismissal.

The solicitor warns that the clerk could receive a six-figure settlement, with the authority facing costs of up to £60,000, if she wins.

The meeting is told the the authority has no insurance to clover a legal claim.

Solicitor Dougal Swan tells councillors in a letter read out at the meeting: "My recommendation is that the council pursue with a single-minded determination a resolution of the grievance brought by Jane Russell and any all claims which Jane Russell may bring."

In response, Peterlee mayor Don Milsom tells the meeting: "This council is going to finish."

He later adds to another councillor Bill Jeffrey: "Do you agree with me Bill that we are in a desperate situation now?

"The staff and everybody will get finished - the lot of us."

Ms Tweddle later adds: "(The situation) is affecting everyone, top, bottom, side - everyone.

"It is time everyone had a long hard look at themselves and outside and said right 'what is going on here' because it is just not on."

In a further development, it is understood several councillors have made a complaint about their colleagues' treatment of the two staff members.

One independent councillor, Peter Watson, said he could not discuss the complaints.

However, he added: "Jane was doing an excellent job for the council and for Peterlee and I wish her all the best.

"The deputy clerk Wendy Tweddle has never been anything other than totally professional. They're both very good."

Peterlee Town Council employs about 40 staff and has an annual income of about £1m.

Cllr Milsom declined to comment and there was nobody at the authority's offices at Shotton Hall willing to speak about the issues.

The Northern Echo was unable to contact the clerk,

Cllr Thompson said she was currently not attending meetings because she was "sick" of how she was being treated.

She added that since the problems at the council had arisenshe had received silent telephone calls which she had reported to police.