The Alliance Party is asking a spending watchdog to launch an investigation into two Belfast City Council funds which allocate £31m of ratepayers' money to community projects.

The party is claiming that the Local Government Auditor's direct intervention is urgently needed due to a "serious lack of openness and transparency" in the processes surrounding the Belfast Investment and Local Investments Funds.

It alleges that community groups which are not "in the know" and are not favoured by the main political parties are greatly disadvantaged.

The Alliance group leader in City Hall, Michael Long, said he was "appalled" that Sinn Fein, the DUP and Ulster Unionists rejected his proposal at a council committee meeting last month to publicly advertise the availability of £2m of Belfast Investment Fund (BIF) money which has been ear-marked for east Belfast.

Two projects linked to the area's local UDA boss, Jimmy Birch, could be in line for more than half-a-million pounds from the fund.

Belfast City Council has insisted that it is committed to openness and transparency in its funding processes.

Mr Long last night told the Belfast Telegraph: "I am seeking an urgent meeting with the local government auditor to raise my party's very serious concerns.

"BIF funding isn't advertised publicly in any meaningful way, which denies many community groups the opportunity to take part.

"Some aren't even aware it exists while those in the know are in prime position to apply and secure huge sums of money.

"At a strategic policy and resources committee meeting last month, Alliance asked that the remaining £2m allocated to east Belfast from the fund be publicly advertised in a meaningful way. The SDLP supported our proposal but Sinn Fein and the two unionist parties voted it down."

BIF is worth a total of £27m and its sister fund, the Local Investment Fund (LIF) £4m.

Mr Long said: "As a party committed to openness and transparency, we believe that the allocation of ratepayers' money must be done through clear guidelines and criteria which we feel do not currently exist.

"We fail to understand why there is such unwillingness to publicly advertise these funds. It is bizarre that the council is distributing millions of pounds of community funding like this. If it was filling jobs in the same manner, there would be uproar."

The Hanwood Trust, of which UDA boss Birch and his wife Caroline are directors, and the boxing club of the Tullycarnet Action Group Initiative Trust (TAGIT) - of which they are trustees - have applied for BIF money.

It must be stressed that other directors, trustees, and staff of Hanwood and TAGIT have no paramilitary connections.

The two projects are aiming for a share of the £2m BIF is distributing to the parts of the former Castlereagh borough.

If funding is approved by councillors, the projects will receive a combined total of at least £500,000 and, sources told the Belfast Telegraph, that the amount could end up as high as £1m.

The UDA boss has been a director of the Hanwood Trust for over three years, according to Companies House, and he is registered with the Charity Commission as a trustee of the boxing club run by TAGIT.

Belfast City Council has previously insisted that it is committed to openness and transparency. A spokeswoman said that all projects in relation to BIF and LIF were "subject to scrutiny through the area working groups, strategic policy and resources committee, and are ultimately ratified at the full monthly meeting of the council".

She added that all projects considered for funding were "highlighted openly in our committee meeting minutes, which are available online at www.belfastcity.gov.uk" and that expenditure relating to BIF was "audited by both our own internal audit service and the Northern Ireland Audit Office".

Belfast Telegraph