The council spending watchdog sees no need to investigate a controversial contract tearing Labour apart in one of Scotland's biggest local authorities.

The Accounts Commission has declined to take any action in response to an independent audit of North Lanarkshire Council's deal with Mears Scotland that cost the public purse £25 million.

Critics believe the original audit, by accountants Scott Moncrieff, is damning, while the ruling administration thinks it vindicates their position.

The new-look deal with Mears sparked a bitter civil war within the ruling Labour group on the local authority.

It also prompted council leader Jim McCabe to deny his friendship with Mears Scotland chief executive Willie Docherty, husband of Glasgow Lord Provost Sadie Docherty, had any impact on the decision.

Scott-Moncrieff have said that Mr McCabe and his fellow councillors were right to act on the contract, which was at risk because Mears said it was losing money.

But they warned that politicians could not be sure they had achieved best value for the public purse without re-tendering the contract on the open market.

Figures within the Labour and SNP have sought to have an outside body, such as the Account Commission, investigate the deal.

That, a spokesman for North Lanarkshire Council said, is now unlikely.

Repeating the administration's stance, he said: “The independent external auditors found that the council’s decision to renegotiate the contract with Mears was reasonable and that we were proactive in dealing with a very difficult situation.

"They also found that members were provided with detailed information to make a decision and that nothing they had found had a material impact on the justification to renegotiate the contract.

“There is no doubt that any other course of action would put 700 jobs at Mears at risk, would have cost the council much more money and would jeopardise a high quality repairs service for our tenants. Had the contract been terminated we would have been faced with months of putting every single repair, no matter how small, out to tender while a new contract was negotiated.

"The cost of that would be enormous and the auditors agreed that the cost per repair would rise under a new contract.

“Against this backdrop, the Accounts Commission has considered the independent external auditor’s report and has determined that no further action is required. Our focus is now on further improving an already excellent service for our tenants."