The scheme is a crucial part of plans to transform the city centre
Plans to build a £200m shopping centre in Newport in time for next year's Ryder Cup golf event are in jeopardy.
Work on the Friars Walk scheme, featuring a flagship Debenhams store, was delayed last year because of the credit crunch.
Work was then expected to start before the end of this year but that now appears unlikely.
Newport council blamed the economic downturn but said it had done everything possible to help.
More than £100m is being spent regenerating Newport during the next 18 months. The £25m Kingsway Shopping Centre, next to the proposed Friars Walk is nearing completion.
It is six years since Debenhams announced that it would take the flagship store in the new development.
The city centre regeneration is not about one golf tournament. It's about the long term benefit of all the residents in the city
Council leader Matthew Evans
Since then the cost of the scheme has not only doubled but its suffered one knock back after another.
It had been hoped that work on the scheme would start before the end of the year but now it probably won't get under way until 2010 at the earliest.
Laura Buchanan Smith, vice president of the city's chamber of trade and a former councillor, said traders are demoralised by the building delays.
"Traders are going out of business and I really see that some people are not going to survive, your small independent trader can't survive.
"Its because of the uncertainty and the disruption they're facing," she said.
"We've got the university on the go, we've got the railway station on the go... all the riverfront is done, all the old town dock regeneration in my old ward Pill, and there's nothing in the centre.
"It's demoralising and it's very upsetting for people
"And people are going away, they're going away to Cardiff, they're going away to Bristol, and they're going away to Cwmbran."
Council leader Matthew Evans said he understands that both the public and traders are frustrated by the delays.
"However, we are where we are. We have to deal with the situation," he said.
"Clearly we want to make progress as much as possible but obviously with the worldwide recession we're in a very difficult position.
Mr Evans said: "I'd far prefer to justify to people that we have got a scheme progressing which is worth while for the long term benefits of the residents in Newport and to see the cranes moving rather than talk about a golfing event, which is clearly very important for the city.
"But the city centre regeneration is not about one golf tournament. It's about the long term benefit of all the residents in the city."
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