THE construction firm demolishing Blackburn's Lord Square has revealed that it has withdrawn from plans to rebuild it.

And the move has raised fears that the rebirth of the shopping centre may be severely delayed.

Construction giant Balfour Beatty, which was expected to build the £66million redevelopment, has reduced Lord Square to a pile of rubble over the past month.

But now the firm has pulled out of these plans, saying only that it had "failed to complete negotiations".

Site owners The Mall claimed it was "completely normal" practice to have no developer in place at this stage - even though building work is set to start when demolition is complete at the end of April.

But councillors said they were "extremely surprised and disappointed" and disputed The Mall's claims that the situation was "normal practice".

And industry experts said the shock move would either delay the new centre or cause costs to rise.

Labour councillor Andy Kay, who was in charge of regeneration when the plans were first drawn up under the council's previous administration, said Balfour Beatty had been expected to carry out all the building work.

He said: "It's a disappointing step in the whole process and it will obviously create a substantial delay.

"The problem with getting someone completely new in, is they have to start from scratch. It's a fundamental restart from a construction point of view."

Loraine Jones, general manager of the Mall Blackburn, claimed it was "completely normal" for the company building a development not to be in place so close to the project's start.

She said: "We are currently in discussions with a number of major building contractors to progress the development. The contractor will be in place when Balfour Beatty complete work, so there will be no delay to the scheme whatsoever."

But Paul Thompson, of Construction News, said he believed Balfour Beatty would not have agreed to carry out the £1.8 million demolition work without the prospect of building the new centre.

He said: "It's a bit of a surprise. You would expect it to be done and dusted by now.

"Balfour Beatty is a builder. The construction is where they would have made their money. Clearly something has gone on there.

"£66 million is not small beer - and a £1.8 million demolition contract is trifling by comparison."

The Lancashire Telegraph launched a campaign in 2002 calling for Lord Square to be pulled down.

The Mall has unveiled a £66 million scheme for the site, with 20 new shops including a flagship Primark store and a new market.

The project was set to be finished in October 2009, but delays in re-routing telephone cables pushed it back to Spring 2010.

A delay to the shopping centre would also affect the council's plans to move Blackburn market to a £10 million site on the ground floor.

Coun Alan Cottam, Blackburn with Darwen's executive member for regeneration, said: "The indications were that everything wasn't right. That was all I was aware of.

"I have done a lot of engineering projects in our time and these things happen in project management.

"You are always concerned. The last thing we want is a hole in the ground for a long time to come.

"But I am sure The Mall has enough experience to deal with this."

Trader Phil Ainsworth, of the council's town centre marketing committee, said: "Whatever happens, the thing is we just want the Lord Square development completed, working, and getting people back into town.

"I don't want to knock the project, but not having a construction firm in place at this point is not what I would call normal.

"As far as I was aware over the last 12 months the indications were that Balfour Beatty was going to build the shopping centre, although it was never formally mentioned at council meetings."

Former council leader Kate Hollern also saId she had assumed Balfour Beatty was going to carry out construction. She said: "I was extremely surprised to find that there was no construction firm in place already on a project of this size. I wouldn't call it normal.

"I am extremely disappointed that the streets look like a buidling site at the moment and for the sake of traders we need to get this sorted as soon as possible."

Balfour Beatty spokeswoman Marjorie Hooper would not reveal the reasons for the lack of agreement.