Shepherd Offshore, owned by the Shepherd brothers, lodged plans for 60 luxury homes in Jesmond, Newcastle, earlier this year.
A row broke out yesterday, when, before a meeting of Newcastle city councillors to decide on the £27m plans, accusations were made the Shepherd family gave funds to the Labour Party and were known supporters.
In a letter to the council’s senior solicitor, Tom Sunter, the chairman of the Jesmond Action Group, Rex Winter, claimed the family donated to the party and demanded the Labour councillors on the planning committee declare an interest.
Mr Sunter said the letter made claims that Labour members of the group “received sponsorship from the party and the Shepherd family are known local Labour Party supporters” and furthermore Mr Winter had claimed in the letter that the Shepherds were involved in fundraising for the party.
But Mr Sunter said: “If the Shepherd family are sponsoring the Labour Party, there is not sufficient closeness between those connections to constitute a personal or prejudicial interest.” Bruce Shepherd strongly refuted the claims and branded them “silly”.
He said members of the family attended Labour Party functions but stressed they had also been to those of the Lib Dems and the Conservatives.
A Labour North spokesman said: “The Labour Party complies with legislation covering donations to political parties. Donations are registered with the Electoral Commission as required.”