A Winchester property boss has given reassurances over the £100 million Silver Hill scheme.

Fears are growing that the economic downturn will scupper the ambitious plans by the city council and Thornfield Properties to redevelop the site in the city centre.

Tony Langridge, chief estates officer at the council, acknowledged the scheme was coming under financial stress.

But he added: “All their (Thornfield’s) other schemes are proceeding. They haven’t pulled out of any. They are confident about continuing to invest in Winchester, and have an intention to stay in the game long-term.”

He was talking at the principal scrutiny committee which is looking at the proposal to make a compulsory purchase order on parts of the land between The Broadway and Friarsgate.

A major landowner, London and Henley, has vowed to oppose the CPO. A public inquiry into the order is expected in autumn 2009 with a decision by the secretary of state in 2010.

The council cabinet on November 18 is expected to agree the making of the CPO.

City councillors have expressed concerns about the alterations to the scheme that Thornfield has requested and the council is poised to agree. Thornfield says the relatively high 40 per cent affordable element would make the scheme unviable.

The proportion of affordable housing has been cut from 40 per cent to 35 per cent and the developer may be allowed to be build those units elsewhere.

The committee heard that if Thornfield said it could not afford to build the 100 affordable homes it would have to seek the council’s agreement.

Cllr Ian Tait said: “The housing mix is changing. Affordable housing is a key element to what we are trying to achieve. The message it is sending is that affordable housing is not important.”

Cllr Kelsie Learney said: “I’m unhappy about the proposal to change the development agreement to accept off-site housing. This is a very important site in the middle of town.”

Cllr Simon Cook said Thornfield was holding “a gun to our heads. It becomes difficult not to allow the revision through.”

Should the CPO be agreed and then the scheme collapse, Thornfield could be forced to pay compensation to the council and then the previous landowners of up to £30 million.

The council has also agreed to change the lease arrangement. A 200-year lease had been due once the scheme was completed. To cut the tax bill, the lease will be passed over before the development.

Cllr Barry Lipscomb said: “We are advised this is straitforward. What is the view of Revenue and Customs? They might take a different view. It might be see by Revenue and Customs as evasion.”