A DISPUTE between Edinburgh Trams and its contractor has been branded ‘a waste of time’ by the chief executive of the council-owned tram development company TIE.

The company has been successful in fending off legal action by the contractor Belfinger Berger after it was allegedly defamed by recently-departed TIE chairman David Mackay.

But it has also emerged that the finances of the deeply-troubled project are to be probed by Audit Scotland.

TIE and Belfinger Berger have been in frequent dispute over costs and the progress of Edinburgh's tram project, but the latest clash followed the use of the word ‘delinquent’, which was used by Mr Mackay to describe the contractor in a newspaper interview.

Belfinger Berger objected to this label, but the row was inflamed further by a BB claim that Mr Mackay had ‘backed down’, following preliminary discussions at the Court of Session on Friday, after which it was agreed not to take the BB case against Mr Mackay any further.

In response, TIE chief executive Richard Jeffery said: “The subsequent statement issued by Bilfinger Berger is nothing less than farcical. It beggars belief. BB’s press release is a misrepresentation of what actually happened in court and we reject it completely.

“David Mackay has not withdrawn any element of his statement and stands by every word that he said. At no time did David Mackay imply, make any allegations of, or introduce the subject of, criminality. The issue of criminality was introduced by BB, we do not understand why.

“It was clear from David Mackay’s statement what he was intending through his remarks and the use of the word delinquent. David Mackay has given no assurances about future comment.

“Edinburgh Trams have consistently sought to protect the public purse on this project and will continue to do so. The last few days have been a waste of time, a waste of public resources and a waste of effort and we will be pursuing BB to recover the costs we have incurred in defending this action.”

The episode marks a new low in the already bitter relationship between BB and TIE. Work on the project has slowed to a crawl, and the length of the network has been trimmed repeatedly.

It has also been revealed that Audit Scotland is now set to examine the finances of the project, whose costs have risen again and again. An interim report will be produced in 2011.

Audit Scotland said: ‘The auditors of Transport Scotland and the City of Edinburgh Council have been closely monitoring the project and its associated risks as part of their ongoing audits. This report will draw on their findings.

‘It is expected to be an interim report which will consider the progress of the project to date, governance arrangements and the key issues which will need to be managed as the project goes forward.’

Edinburgh City Council, which owns TIE, said: ‘Our understanding is that Audit Scotland are not seeking to audit the tram project at this time, but merely seeking a report early next year which will focus on the project's progress, costs and key issues to date.’