SILVER Hill is a tale of false dawns, apocalyptic predictions and complex law which has tripped the scheme up at every turn.

But this week could be one of the biggest junctures in its history, as Winchester City Council looks seriously at ditching its development partner and starting anew, some 20 years after the idea was first touted.

TH Real Estate (THRE), then known as Henderson Global Investors, took over the project in 2010 after the collapse of previous developer Thornfield.

The plans from that time, including 287 homes, 95,000 sq ft of shops, a new car park and a bus station, are the same which the council is insisting go ahead now.

But company chiefs claim the scheme will fail to meet building standards and must be changed, again dropping the bus station as well as cutting parking.

And 100 affordable flats would be swapped for an undefined "amount of on site affordable housing".

In a letter to council leader Stephen Godfrey, Mike Sales, head of TH Real Estate, claimed the bus station had to go because Stagecoach "will not operate such a facility".

However, the bus company has reiterated that it might run the station if necessary.

"Our preference would be for the development to include on-street bus facilities," a spokesman said.

"However, if the only way for the development to progress is through the inclusion of a bus station we have said we would consider managing the facility, provided an appropriate commercial agreement was in place."

THRE's first changes, accepted by the council in 2014, sparked public outrage and a High Court challenge from rebel Conservative councillor Kim Gottlieb, who saw the move quashed on the grounds they were unlawfully kept from commercial tender.

Mr Sales said the judgment left the scheme "incapable of construction to even meet current statutory building standards without severe compromise to the quality and value of the product, if it was possible to achieve."

It is the first time the developer has warned publicly about building standards since the judgment was handed down almost a year ago.

And Cllr Godfrey said that while the company raised concerns on the issue last month, it had always indicated construction would start before the New Year.

Ditching THRE and starting again could take longer and deliver worse terms for the council but "may be the better long-term solution," according to a new report by corporate director Steve Tilbury and head of legal Howard Bone.

It would enable a re-evaluation of the area and "legally compliant process to secure the redevelopment," they said.

That will excite some backbench councillors, who feel the design is out of date. But others fear the city will be left behind as a shopping destination if the centre is not revamped as soon as possible.

A compulsory purchase order on the land expires in March, but city officers now expect to avoid an expensive reapplication by serving notice to implement it.

But looming over the council is the prospect of legal action if it terminates its contract with THRE. The pension investment fund claims it has spent £10 million on the scheme to date and Mr Sales said walking away before the appeal would breach the council's obligation to act in good faith. Civic officers say being sued is "unlikely".

The council's Lib Dem opposition have called on Conservative bosses to start from scratch.

Group leader Cllr Lucille Thompson said the scheme had become “completely unworkable”.

She said: “I think there's a real possibility of it collapsing entirely.

“We think the time has come that actually we need to really draw lots on this and give the council a bit of breathing space, to allow them to come back with a scheme that will actually benefit Winchester and will be fit for the 21st century.”

THRE has yet to sign vital deals with its financial underwriter and the housing association which would operate the flats.

Mr Sales said the groups involved "remain committed to the scheme" and blamed the delay on Cllr Gottlieb, who he accused of using privileged information to "usurp" the scheme and "destabilise" its deal with the funding partner.

Cllr Gottlieb declined to comment on the claims.

Mr Sales, closing his letter, said: "Despite the challenging circumstances we both find ourselves in, I believe in investing in the long-term success of the city.

"Whilst we have tried our investor's patience, I am sure that there is a solution which matches their investment requirements today and the long-term aspirations of the vast majority of the people of Winchester."

Meanwhile, solicitor Claer Lloyd-Jones has prepared a draft of her delayed review of Silver Hill.

It is now more than six months late, and events have long since overtaken her, but Cllr Godfrey ducked calls to set a publication date last week, saying the council has no control over the independent process.

Ms Lloyd-Jones is investigating decision-making which led to the 2014 scheme being unlawfully kept from commercial tender.

Cllr Godfrey also pledged to release the costs of the review to councillors "as soon as those costs are clear".

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