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Andy Burnham’s flagship ‘Number 10 North’ is being set up with a bold aim to ‘oversee the biggest rebalancing of power our country has ever seen’.

But in what could be an immediate setback for the new Prime Minister’s plan to move political power from Westminster, a top barrister has now claimed that the land where the department’s new offices will be based was purchased ‘unlawfully’ by Manchester City Council.

Christopher Knight KC, acting on behalf of property mogul Aubrey Weis, believes officials twice broke the law before acquiring the leasehold for the 10.5-acre former Central Retail Park site for £35million in late 2017.

The land in Ancoats, on the northern edge of the city centre, is currently a building site.

Just over half of the site, some 5.5 acres, is set to be transformed into the Government’s new £2.3billion ‘Digital Campus’, which will include No 10 North and house 7,000 civil servants when it is completed in 2032.

But Knight, whose client has been embroiled in a separate legal challenge against the Greater Manchester Combined Authority (GMCA), formerly overseen by Burnham as mayor, has argued that the decision to purchase the retail park’s leasehold seven years ago fell foul of rules governing such deals.

Vision: The land in Ancoats, on the northern edge of the city centre, is currently a building site

In a legal opinion seen by The Mail on Sunday, Knight said the GMCA ‘did not comply’ with rules that required it to obtain a formal valuation report for the site before making an offer to its previous owner TH Real Estate.

He added: ‘I understand that this represented the most expensive land acquisition ever made by the council for an inner-city site.’

Another legal breach is claimed to have occurred when members of Manchester City Council (MCC), one of the eight local authorities that make up the GMCA, were not informed of another offer to buy the site’s freehold – owned by MCC – by property consultant Metis.

Metis was acting on behalf of another Manchester property mogul, Damian Flood, who runs developer Cole Waterhouse.

A report to councillors proposing the acquisition of the retail park leasehold in September 2017 made no mention of Metis’s offer.

Regarding this, Knight said: ‘The failure to draw attention to the offer from Metis in the report was unlawful because it resulted in the council taking the decision without having regard to all considerations relevant to the exercise of its fiduciary duty when considering the acquisition of land.’

He said the council’s members were ‘not obliged’ to accept Metis’s offer – but were ‘not given the chance’ to consider it.

The lawyer also said a report for the council – written in September 2017 by property consultant Jonathan Bernstein, son of then Manchester City Council chief executive Sir Howard Bernstein – found the value of the retail park for commercial use was £33million, and £25million to £30million for residential use.

But the land’s value was later found to have fallen to £27million by 2022 after a proposed property development for the area was shelved, sparking accusations that the council had made a ‘massive overpayment’ for the site.

Controversy: The controversy over the property threatens to tarnish Burnham’s attempts to spread power from Westminster across the UK

Knight said: ‘Whenever the council decides to expend public money, it must act in accordance with its fiduciary duty.

‘That might be thought to be a particularly significant obligation where the decision proposed is the acquisition of a property interest in land which is expected to cost the council over £42million.

‘That is a very large sum of money for a local authority and great care can be expected to be taken in connection with the decision-making authorising it.’

The formal deadline to challenge the property deal elapsed in 2023, after six years.

Spending the day at No 10 North’s interim base in another Government building in Manchester on Friday, Burnham said: ‘It creates that sense of a more balanced country, and that big things can be done from here.’

But the controversy over the property threatens to tarnish Burnham’s attempts to spread power from Westminster across the UK.

British-born Weis, 76, the owner of a £1billion property empire, is now based in the US and was unavailable for comment.

The allegations over the future No 10 North site come as the mogul is embroiled in a legal challenge against the GMCA over claims that the authority provided loans to another developer, Renaker, at preferential rates.

Last month, the Court of Appeal found against his claim over the Renaker loans; however he is now preparing a final challenge in the Supreme Court.

A Manchester City Council spokesperson said: ‘Acquisition of the former Central Retail Park site has ensured that the site can complement the wider regeneration of the area.

‘We disagree with the opinion presented about the acquisition.

‘The decision to acquire the site has not been challenged and the price reflects the value of a large retail site and key city centre regeneration opportunity.

‘The cost to the council was agreed on the basis that it would be recovered through the long-term development of the site.’

The GMCA and Downing Street were contacted for comment.

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