THE EUROPEAN Commission has been asked to investigate a scheme to regenerate Liverpool’s Edge Lane corridor, the Daily Post can reveal.

Campaigner Elizabeth Pascoe claims the way housing contracts were handled constitutes unfair state aid.

The allegation is denied by city authorities.

The North West Development Agency is currently drawing up a response on behalf of itself, the council and regeneration body Liverpool Vision.

The news comes on the day Ms Pascoe’s latest legal challenge to the scheme, which would see Edge Lane widened, is due to be heard in the High Court.

During the two-day hearing she will challenge a compulsory purchase order forcing home-owners to sell up.

It is the latest bout in a long-running saga over the £70m plus project.

Last night Cllr Louise Baldock, who represents Kensington and Fairfield, said the situation around Edge Lane was desperate due to the huge number of empty homes.

Liverpool Vision is hoping for a successful outcome to both cases so work can start early next year.

The EC investigation centres on Bellway Homes being given “preferred developer” status to build new homes as part of the Edge Lane Scheme.

In 2001 when the Housing Market Renewal Initiative (HMRI) was launched the city was divided into four “Zones of Opportunity”: Kensington, Anfield, Picton/Wavertree and Speke Garston. Bellway won the bid for the Picton/Wavertree area.

The Daily Post understands an open procurement procedure was followed to find a preferred developer for each zone.

Using preferred developers was a mechanism to make a company develop the less desirable, and less profitable, areas in each zone as well as more lucrative parts.