The profit would go towards a $1.1 million modernisation of the council’s Scott Street outdoor equipment depot which sits adjacent to the Midfield meatworks boundary.

The Standard understands the land has been valued at $1.4m and Midfield would buy it for about $1.7m.

The council’s chief executive Bruce Anson yesterday again hosed down inferences of improper process over the proposed land deal and assistance to the company which received a $1.5m state grant for a separate $20m proposed expansion and upgrade involving other sections of the business.

Controversy has surrounded the council’s role and a possible conflict of interest by Premier and South West Coast Denis Napthine who shares ownership of a racehorse with Midfield owner Colin McKenna.

Dr Napthine yesterday called for public apologies from Opposition Leader Daniel Andrews after the state’s corruption watchdog said it did not have sufficient evidence to launch an inquiry.

“The claims that have been made by Daniel Andrews have been found to have no basis in fact and amount to nothing more than smear and innuendo,” Dr Napthine said yesterday.

“If Mr Andrews had a shred of decency, he would apologise to me and the others he has smeared in this grubby exercise.”

The Age at the weekend again referred to a leaked briefing document from a February 10 confidential city council meeting where the project was discussed and an agreement was approved for the council to buy one hectare of Crown land to then be purchased by Midfield for construction of a dairy processing plant.

Midfield already leases half a hectare of Crown land and wants permanent title along with an adjacent half a hectare now used as part of the council’s depot yard. The council would then shift its depot further south on Crown land it already leases from the government and will spend $1.1m on upgrading it.

Mr Anson said yesterday the newspaper’s inferences about taxpayer and ratepayer assistance for Mr McKenna’s company were misleading.

He said the Crown land sale which had been approved in-principle in 2003 by the former Bracks Labor government was only now set to be finalised because Midfield was in a position to purchase it and proceed with the expansion. 

Mr Anson said councils were exempt from capital gains tax leaving a $300,000 surplus which would be added to $600,000 from a government grant pool and $210,000 of council  funds.

“There have been long-term plans to upgrade the depot which has had no substantial money spent on it for at least 20 years,” he said. 

“Now with the land sale agreement from Midfield we are in a position to facilitate the upgrade.”

The Age said the leaked council document revealed an elaborate plan for further assistance to Midfield that if acted on would leave government and council $810,000 out of pocket. However, Mr Anson said that money was to help upgrade the depot.

It included part of a $2m rural infrastructure grant allocated by the state government three years ago. 

“We spent $500,000 of that on renovating the old post office building, several hundred thousand on various other pieces of infrastructure, another $600,0000 will go towards the depot and a couple of hundred is still to be spent,” he said. 

Mr Anson also defended his attendance of a Liberal Party fund-raising dinner on Wednesday night which also featured Dr Napthine and racehorse trainer Gai Waterhouse. “What the metropolitan media seems to fail to understand is that in regional and rural Victoria there’s an expectation that council leaders attend these type of functions whatever political party is involved,” he said.“It give us the chance to speak with key figures on things that matter to ratepayers.”