EUROPEAN Union investigators say they are still probing a key Liverpool regeneration project almost four years after they were first called in.

Last night, they were accused of a "whitewash" after admitting that they had still not completed their inquiry into allegations involving the use of substantial amounts of European grant aid by the Rope Walks Partnership.

A cloud has hung over the project since the inquiry was launched in January 2000.

The probe by OLAF, the European Commission's financial investigation unit, followed a number of complaints and board resignations in the early days of the Rope Walks scheme, set up to regenerate the area bordering Duke Street and Chinatown.

North West MEP Arlene McCarthy last night said the length of the investigation was undermining trust in the EU.

She said: "We are almost four years down the line and are still none the wiser.

"Decisions need to be made on this now. This is the kind of incident which gives European institutions a bad name."

A number of complaints were made in the early days of Rope Walks, including some by Liverpool City Council Labour member Coun Joe Anderson, a board member who resigned, believing some colleagues may have had a conflict of interest when the Objective 1 funding was shared out.

Coun Anderson formally made his complaints known to OLAF investigators in November 2000 and January 2001 but has heard nothing from the EU during the last two years.

He said: "I would describe it as a whitewash. The cynic in me sees this inertia from the investigators as an attempt to deflect criticism from themselves for not having scrutiny procedures in place in the first place.

"If any European mandarin can justify the delay, he is a better man than me."

OLAF spokesman John Burke said investigators had to apply to extend their inquiries every nine months but refused to say when they would release their findings.

He said: "This investigation is ongoing. It has not been mothballed, shelved or any other description you would like to use.

"The allegations involve EU funding to the Rope Walks Partnership via an accountable body, in this case Liverpool City Council. The contents of the allegations are still confidential."

The Rope Walks scheme originally won £15m of Objective 1 European money but almost lost some of the aid when it was not spent on time.

EU officials eventually agreed to extend the spending deadline after Liverpool City Council and North West MEPs argued plans had been delayed because of severe weather.

The partnership was wound up on the successful completion of the scheme. Former chairman of the partnership, Coun Beatrice Fraenkel, said: "We were absolutely open and welcomed it (the investigation) if there was any complaint or any concern.

"We were perfectly clear that all our procedures were absolutely spot on.

"It is absolutely right and proper that if anyone has any worries then clarification is sought.

"The scheme had a six-month extension in 2001 and I would have been surprised if that had been granted if there were any suspicion of misdemeanour." A Liverpool city council spokesman said: "Rope Walks is a successful inner city regeneration scheme.

"We would be as interested as anyone else as to what the outcome of the investigation was."