Plug pulled on £77m development

The developer hopes to find alternative funding

Plans for the multi-million-pound redevelopment of a Cumbrian town have been halted after the developer had funding withdrawn.

The £77m scheme for Penrith included four new town squares, a superstore, flats, bars and sports facilities.

But the National Australia Bank said it would no longer fund the project citing "commercial reasons."

Developer Lowther Manelli said it was still committed to the project and was looking for a new backer.

It was hoped the venture, which was first put forward in 2005, would create 950 jobs and boost the town's economy.

The proposals included a new football stadium at Frenchfield and an upgraded country park at Wetheriggs.

'Credit crunch'

It was also proposed the scheme's central feature, a new town square, could be a parking area and host public events such as fairs and festivals.

A statement from Lowther Manelli said: "All of us are in some way being affected by the credit crunch as banks reign in their commitments to property markets.

"Penrith New Squares in no exception.

"Citing concerns with the current state of the market, particularly the commercial and residential sectors as its reason, National Australia Bank has withdrawn its project funding.

"Lowther Manelli therefore regrets to announce that due to circumstances outside of its reasonable control, the development is being delayed while new long term funding arrangements are put in place."

The company added it, and partner Sainsbury's, hoped to restart the project in the new year with alternative funding.

A spokesman for the National Australia Bank said: "While we do not take this lightly - the decision was based on commercial reasons."