THE £40 million 'jewel in the crown' redevelopment of Lancaster's derelict Kingsway site has lost its sparkle after the developers asked for most of their deposit back.

Chelvertons, who won the bid to redevelop the former Kingsway swimming baths and bus station site, have asked for £300,000 of their £400,000 deposit to be returned.

And councillors have reluctantly agreed.

Only the Greens have condemned the new deal and their leader Cllr Jon Barry said: "When Chelvertons made their improved offer for the site in writing they made no mention of the deposit being returnable. They now say that this was an error and that they forgot to mention it at the time. I know we can all be absent-minded but not many people would simply forget hundreds of thousands of pounds.

"What is the point of having a deposit if you agree to give most of it back if things go wrong?"

Chelvertons have agreed a price of £4 m illion for the site and offered a 10 per cent deposit. But under the new arrangement they will get most of their deposit back even if their proposals fail to get through a public inquiry or fail to satisfy the County Council's standards for new highway arrangements.

Cllr Barry added: "If we'd known at the time that Chelvertons were not going to give a proper deposit, they may well have voted to sell the land to someone else."

Deputy leader of the Independents, Geoff Wilson, said: "No one's happy with the situation but it has consequences for our capital programme. If the deal collapsed we'd be left with a half developed site which is what no one wants. Chelvertons have already invested heavily and hopefully it will go ahead as planned."

Converted for the new archive on 14 July 2000. Some images and formatting may have been lost in the conversion.