Town plan hit by economic crisis

Cranbrook was designed to include affordable homes

Plans to build a new town of 3,000 homes in East Devon have been put on hold "indefinitely" because of the economic downturn.

East Devon District Council confirmed that developers involved in the Cranbrook project have pulled out.

The council said the builders could no longer afford to pay for the town's infrastructure, a condition of their planning permission.

The main developer, Persimmon, declined to comment.

'Disappointing' situation

Council leader, Sara Randall-Johnson, said: "We're all caught up in this economic trap.

"We had hoped to start building this year. Cranbrook has been in the planning for 15 years. It's a great disappointment.

"I think it's going to be years, not months, before the situation changes."

Under Cranbrook Agreement 106 the town's developers agreed to pay for its infrastructure, including a school, a railway station and a sewage system.

Ms Randall-Johnson said that, as people are not buying houses at the moment, the developers can no longer afford to keep to the agreement.

A spokeswoman for Persimmon, one of the building firms in the consortium to build Cranbrook, said the company would be unable to comment at the moment.

A third of Cranbrook's homes were supposed to be affordable and all were designed to conform to government sustainability criteria.