The biological father of a surrogate mother's newborn baby has begun a legal battle for custody of the child after she refused to give him up. Kate Watson-Smyth reports on the looming custody battle.

Clemens Peeters, the biological father of the baby he has named Julian, has filed application for access at Middlesbrough County Court and plans to file another for custody.

Karen Roche, 32, who gave birth to the child she calls Stuart eight days ago, agreed to bear the child for Mr Peeters and his wife, Sonja, for pounds 12,000.

But she broke her side of the agreement and even claimed to have had an abortion to prevent the Peeters from having the baby.

In an interview with BBC TV's Panorama programme, to be shown tonight, Mr Peeters accuses Mrs Roche of using the child as "some kind of merchandise that could be sold to the highest bidder".

He says: "We feel that's our baby, we are the parents that are meant to have the baby. We are the ones that think we can give the proper love and care it needs."

The legal struggle is the culmination of nine months of wrangling over the fate of the child.

Mrs Roche has described how she "bonded" with the baby while it was still in the womb.

In an interview with a national newspaper she said: "I wouldn't sell him for a million pounds. The joy he is bringing us is as good as winning the Lottery. There is no deal to sell our baby to the Peeters or anyone else.

"Even before he was born, I had bonded with him. Then, when I saw his beautiful unwrinkled face, the bond grew deeper."

Mrs Roche claims the Dutch couple broke their side of the deal by failing to fulfil promises to visit Britain to monitor the pregnancy.

She added: "If the surrogacy arrangement hadn't gone wrong, I know I would have been strong enough to hand him over. I wouldn't have allowed myself to bond with him in the way that I have, both before and after the birth."

The relationship between Mrs Roche and the Peeters soon turned sour after she was put in touch with them by Kim Cotton, Britain's first surrogate mother, last January.

Mrs Roche later decided she would not hand the child over and threatened to have an abortion. Another deal was also struck with a second couple, Ed and Jean Hunter.

Mr Peeters tells the programme of his "total disbelief" when he and his wife read in the newspapers that Mrs Roche had not terminated his child but was in fact in the process of negotiating to hand over the baby to another couple.

"We thought that the worst thing that could ever happen to us had already happened. It's like does the nightmare ever stop."

Panorama: The Surrogate will be shown on BBC 1 television tonight at 10pm.