The $30-million pilot training school was given the tick of approval by the Foreign Investment Review Board (FIRB), despite concerns surrounding it's links to the Chinese government.

The deal has been put under the spotlight after revelations the pilot training school partnering with Virgin, Australian International Aviation College (AIAC), is owned by two Chinese conglomerates with strong ties to the Chinese Communist Party.

Tamworth mayor Col Murray said he was aware AIAC was "90 per cent" owned by the two Chinese companies: HNA Group (80 percent) and Winbright (10 per cent).

"In my view the concern borders on paranoia," Cr Murray said.

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"The central government in China are in many, many cases part owners of large Chinese corporations.

"I understand that may cause confusion to some but Virgin Australia have always been fairly clear with us.

"When they first came to present to our council, they were quite transparent in the information they put on the table with their partners."

In March, general manager Paul Bennett denied any knowledge of Chinese involvement. However in July, Cr Murray stated council had known all along.

The Leader asked Cr Murray if the "paranoia" was fuelled by the contradiction.

"I can understand that, these negotiations happen at a fairly intense pace," he said.

"But my recollection certainly has always been quite firm that Virgin did present all this information up front."

Council's media team stepped in to shut down questions about the Chinese media press conference regarding the announcement, which was held in Sydney months before the deal was officially revealed in Tamworth.

The Leader understands it was Virgin's foreign ownership, not AIAC's, that was investigated by FIRB.

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