SWINDON’S pioneering wi-fi project could be stalled if Labour councillors succeed in freezing the remainder of a £450,000 loan to the company tasked to oversee it.

The council’s Labour group is calling for the funding to be delayed pending the outcome of an investigation into the tendering process.

The latest twist in the wi-fi wars has been condemned by council leader Rod Bluh and wi-fi company Digital City chief executive officer Rikki Hunt, who says the political infighting is costing him dearly.

The news comes days before the Cabinet meeting to sanction the second instalment of the council’s £450,000 investment.

Labour group leader councillor Derique Montaut said: “I understand that the Conservative administration are eager to get wi-fi rolled out throughout the borough.

“However, there is an investigation into the wi-fi deal being undertaken by the council's Internal Audit and there have been enquiries made by the district auditor into the deal.

“So I think the Swindon council tax payers would prefer it if the administration waited loaning the second instalment of their money until it has been concluded that this deal was above board.

“In my opinion it’s better safe than sorry.

“The council and Digital City stand to be in a much worse financial position if the auditors find the wi-fi deal to be contemptuous.”

Coun Bluh described the latest attack from the Labour group as purely for political gain and said it did not take into consideration the needs of the people of Swindon.

He said: “I am deeply disappointed that the opposition party should be so desperate to score political points that they are willing to sabotage and undermine private sector investment in Swindon.

“The choice the people of Swindon face is clear. The Conservative administration believes in working in partnership; the Labour Party clearly does not.

“The Labour opposition is being contemptuous of the residents of the borough by failing to support this investment. The Labour opposition is jeopardising the borough’s economic future by trying to bring down Digital City.

“They have maintained that they support the principle of wi-fi and are only challenging the decision-making process. This is clearly a smokescreen for blatant partisan opposition.”

Mr Hunt has said that the political wrangling has had a massive affect on his business and the business model for free wireless internet in Swindon.

He did say that, despite this, approximately 600 people in Swindon have signed up for the free internet package.

He said: “First of all the investment is a contract – the council pull out of this, they break the contract and face penalties.

“Of course we are struggling - we are a new company and, yes, we are having some technical problems – this is always the case when you are starting a new, technology-based business. These political rows affect us dramatically.”

“We need new partners and investment and people are not going to want to invest in us with all this going on.

“It has been very, very frustrating and what stuns me is that the Labour group are preventing us getting on with rolling out free wi-fi, which is something that will increase social inclusion - something I thought was at the heart of their group.

“In terms of an investigation, I am very confident that whoever looks at this would find nothing has been done wrong.

“This political scrap is 100 per cent damaging our business plan.”

Mr Hunt also said that the scheme has attracted interest from 14 other councils in the country.

The agreement of the second instalment of the council’s loan is to be considered at Cabinet next Wednesday.

A spokesman for the Audit Commission said: “We can confirm that we are aware of the internal audit department looking at this.

“We will take it into account when we perform our normal audit duties.”