WARRINGTON Borough Council is setting 'a very bad example' by buying Birchwood Park offshore to 'avoid tax', according to Helen Jones.

The Warrington North MP has written to the authority urging finance chiefs to 'think again' about the way they have purchased the site.

The £200 million plus contract to buy the business park from Oaktree Capital Management was finalised on September 12.

It could net the authority in excess of £10 million a year in rent.

Mrs Jones said she has 'reservations' about the deal, although she recognises 'that councils are having to find new ways of raising money'.

She added: "I have no doubt it will raise funds in the short-term but buying property, which is all in one place and paying more than the valuation, does not provide sufficient hedge against future changes in markets.

"That, however, is a matter for the council.

"What concerns me even more is that this deal is being done through an offshore company to avoid around £10 million in tax.

"This is not illegal but it is, in my view, morally questionable.

"What is more, it is contrary to Labour Party policy.

"Our policy is to clamp down on tax havens and to root out tax avoidance.

"As the Shadow Chancellor has said: 'tax avoidance is a scourge on society.'

"For a tax-collecting authority to take this course is very unwise.

"I understand that councillors have said that the money is better in the borough's pocket than the Government's.

"What would they say to a council taxpayer who says that their council tax is better kept in their pockets than given to the council?

"None of us get to decide whether we pay our tax according to which party is in Government.

"Paying tax is the price we pay for a civilised society.

"Not paying your dues sets a very bad example and I hope the council will think again and immediately activate the option which would bring the ownership into the UK."

The council did not wish to comment.