Sutton councillors butted heads last night after plans were green lit to hand a £1m discount on the historic Lodge building to a charity linked with Liberal Democrat MP Tom Brake.

Ecolocal, of which Mr Brake is an unpaid director, was granted a 125-year lease of the Carshalton landmark and will pay a lump rental sum of £600,000 to Sutton Council.

The building is worth between £1.5m and £1.7m on the open market, according to council reports.

The redevelopment would see nine flats built, as well as offices and community spaces, but Conservative councillors have called for an independent inquiry into the deal and say Sutton Council should develop the flats itself to make money.

Councillor Neil Garratt said: "With the involvement of Tom Brake as a director and trustee of Ecolocal there was bound to be a question mark over any deal where a large public building is sold off £1m below market value.

"In those circumstances I would expect an overwhelming desire for transparency to show the public that the Lodge is not being sold off on the cheap.

"Ecolocal, Tom Brake, this administration and the Liberal Democrats as a whole want to avoid any suspicion of corruption and so I'd expect them to be eager to demonstrate this and show that it is not a shady back-room stitch up."

Mr Brake has previously said: "I don't see it as a conflict of interest. I have no part in the decision that Sutton Council has made."

Lib Dem Simon Wales said: "At a time when the council's funds are being decimated by Tory cuts it is imperative to build community resilience so that more people can do more for themselves, leaving the council to focus on those who most need support.

"It is also important that the legacy of the building is considered.

"By working with a community group with a lease the council will retain a degree of control over the property. This would not be the case if the Conservative's plan would be considered."

The Tories' Tony Shields said the Lib Dems had not looked at their proposals until recently.

He said: "For a council that claims to be bereft of funds the Sutton Lib Dems seem to have a lot of spare money for projects submitted by their favourite groups.

"The political arrogance of this council knows no bounds.

"Astonishingly, we Conservatives discovered today that the council only began investigating our business plan last week, having previously told us that all options into the development of the site had been considered.

"This was a lie.

"The council has never had any intention of entertaining a different proposal. The council had the temerity to plug Ecolocal's figures into its bias spreadsheet.

"This is the example of another political decision being dressed up as an economic one."

Councillor Allan Salter criticised the Conservative-backed plan for failing to take community benefits into account.

He said: " The Conservative alternative lacks cost-effectiveness, environmental and local accountability and fiscal efficiency.

"The Liberal Democrat group believes the Lodge should be put to use as for community-related activities, whilst meeting economic goals.

"The Conservatives, in my view, place too much emphasis on market value without due weight being given to other considerations, including community benefit and involvement."