Controversial federal backbencher Belinda Neal, famously demoted by the PM over the “Iguanagate” scandal and ordered into counselling for anger management, could soon find herself back in the spotlight over a $600,000 payment to local A-League soccer team the Central Coast Mariners.

Crikey understands that a bitter row, annoyingly dubbed “Marinergate” by insiders, is brewing between Central Coast ratepayers and two cash-strapped local councils, Gosford and Wyong, over money used to fund the Mariners’ disastrous Asian Champions League campaign.

The NSW State Government, through its regional funding arm Business Central Coast, gave $200,000 to the Mariners in March, on the understanding Gosford and Wyong councils would both match it dollar for dollar, doubling the councils’ usual contribution.

The soccer-mad Ms Neal serves as an honorary director on the Mariners’ board, in addition to her responsibilities in the House of Representatives.

Crikey understands the level of ratepayer support for the franchise is unprecedented, with other A-League clubs comparatively starved of local government largesse.

According to sources close to Gosford Council, both the Mariners and State Development Minister Ian Macdonald, who serves the same factional chiefs as Ms Neal’s husband John Della Bosca, pushed hard to convince Gosford and Wyong to come to the party.

After Wyong agreed to the extra $200,000 payment in February, Mayor Bob Graham, Deputy Mayor John McNamara and Councillor Doug Eaton travelled to China to watch the Mariners in action. Graham serves with Neal on the Mariners board of management. It is believed the trio travelled as private citizens.

Graham confirmed the jaunt to Crikey this morning but refused to comment on the $200,000 payment due to his “conflict of interest”. He said that although Wyong had agreed to pay the cash, the amount had yet to be transferred.

Gosford and Wyong’s balance sheets are in tenuous positions. A damning report issued earlier this week, and carried out before the GFC gathered steam, claimed both councils possessed “unsustainable” cash positions and would need to substantially raise rates to avoid bankruptcy.

Earlier this year, Gosford Council was the subject of a 7:30 Report investigation claiming it could lose up to $47 million due to its exposure to Lehman Brothers CDOs, a proposition rejected by Gosford Mayor Chris Holstein who believes the paper CDOs aren’t worthless at all. Today’s Australian Financial Review reports that CDO holders would emerge with 13.5 cents in the dollar from their investment, not quite a $47 million loss, but a substantial haircut nonetheless.

In the original state government media release from March, Macdonald said the Mariners trip would boost business investment in the region by exposing the region to Asian TV audiences. The minister said seven companies had already been drawn to the region as a result of the Mariners partnership.

But insiders say the trip could turn out be a net negative — the Mariners failed to win a single match in Asia and axed four players last week after a demoralising tournament-ending 1-0 loss at home to Chinese side Tianjin Teda.

Insiders say the inclusion of the website on the Mariners’ Asian jerseys has been a marketing disaster, with clickthroughs said to be minimal, some say due to a combination of confusion over the unusual domain name and a lack of interest.

Gosford deputy mayor Craig Doyle, while still supportive of the cash boost, couldn’t confirm whether the money would bear fruit.

“We won’t know it was value for money until we receive the report”, he told Crikey, alluding to a forthcoming value for money probe.

Sources argue the Mariners payments have been hidden from the public by the fact that both councils and the state government channelled the funds through an umbrella group, Business Central Coast. They say this kept the funding from attracting overt scrutiny.

This ad appeared on page 66 of the Central Coast Express on 22 May, listing the Mariners’ major sponsors. But it mysteriously failed to include the Wyong and Gosford logos, including only the words “Central Coast”. When questioned after a recent council meeting, one Wyong councillor is believed to have laughed off the complaint, declaring residents could detect council involvement due to the presence of a stylised floral design common to both organisations.

The political backdrop to the payments is interesting one. It suggests a cliquey local scene dominated by power couple Neal and Della Bosca and including luminaries like Transport Workers Union chief Tony Sheldon, to which the couple owes their factional support.

Critics accuse Neal of using the soccer club as a powerbase to shore up her shaky preselection ambitions, a tactic also employed by her ALP counterparts in western Melbourne. Sources say Neal’s numbers are hanging by a shoestring with her 2010 preselection in grave doubt.

The part-owner of the famous Iguana Joes bar, Ray Awadallah, also served on the board of the Mariners alongside Neal, with both identities joining as foundation directors on October 14, 2005. Awadallah was the first person Della Bosca called after the Iguanagate scandal hit, with Della allegedly demanding he make the controversy “go away”.

Neal seems to be an ardent backer of the European game. But her enthusiasm famously bubbled over in May 2008 when she was suspended for two matches for kicking a rival player while playing for local club Umina United.

The Gosford Council meeting on Tuesday night ended in farce after quorum repeatedly couldn’t be reached, because of exclusions due to vested interests. Questions over the payments are likely to be aired when the council meets again in two weeks’ time.