LANCASTER University bosses remain optimistic that the first stage of a £112 million construction project will be completed on time - despite delays to the start.

The University is in talks with its banks in the hope of overcoming legal and financial issues, which have delayed the start of the scheme's first stage.

Director of estates Steve Lunn said he remained optimistic that around 400 new rooms would be available in time for the start of the academic year next September.

"The financial matters are tied with the legals, because the lending bank in terms of the agreement and commercial issues are looking for a certain level of security," he said.

"It should not delay the project by a year.

The difficulty is, if the start is delayed beyond Christmas then we would not be able to deliver it in September.

"Because we need it for the start of the new academic term, there is no point in saying we can deliver it in November.

"The further you move the start date, the more difficult it becomes in terms of delivering an end date.

" Moving the start back to next year would be the worst-case scenario, the absolute worst case scenario."

Work is due to begin on infrastructure on the site, including a reservoir intended to reduce the risk of flooding in Galgate, before work starts on the buildings themselves.

The new development, on the site of the former Barker House Farm, will eventually deliver more than 2,000 new student bedrooms in the next two years.

It will be followed by the demolition of five of the university's nine existing colleges, which will see inadequate 1960s' buildings replaced with new accommodation.

This will take a further two years.

The deal is being financed by construction giant Jarvis, which will recoup the money through student rents over the next three decades.

Mr Lunn said work was progressing well on fulfilling the terms of the planning permission, including the production of an environmental transport plan.

The university is also meeting with Ellel Parish Council and has held meeting with critics of the buildings' design.