CIVIC chiefs overwhelmingly backed the Silver Hill scheme last night in a decision that puts the £150 million development on the brink of going ahead.

Winchester City Council agreed at a marathon meeting that the firm behind the controversial project, TH Real Estate, has met its contractual obligations and can send the development 'unconditional'.

Rebel city councillor Kim Gottlieb has threatened legal action against the council for approving what he called a "disaster for Winchester".

Terminating the contract could lead to months of costly legal battles with the developer, council leader Stephen Godfrey said, warning that delay to new shops and homes would "rot" the area.

The Liberal Democrats welcomed the return of affordable housing and a bus station and warned against starting over.

Cllr Martin Tod said: "[If we terminate] we are going to be in court and we are likely to be in court with the potential of losing a very serious amount of money for a considerable period of time."

Warning that new developers could cut social housing or the bus station to find extra profit, he added "We've seen proposals that are so fanciful, frankly, that I was looking for the fields where the unicorns dance.

"We've seen pictures that supposedly tell us that there's some fantasy world around the corner, and I don't see how it's going to happen. We don't know what we're getting, and there are genuine, real reasons, hard concrete reasons, why it would be significantly worse than what we have now.

"There is still the opportunity and there is still the time to achieve meaningful improvements to that design within the planning process."

An audience of around 40 residents, many jeering pro-Silver Hill councillors, dissipated as the meeting ran into the early hours of Thursday.

Councillors agreed by 38 votes to six that the developer had met its obligations over the scheme's social housing provider, funding partner and financial viability.

Council also resolved to seek improvements but noted the binds of February's High Court judgment, which ruled "material" changes would force the scheme to be tendered.

TH Real Estate has indicated its willingness to tweak materials and appearance, council leader Stephen Godfrey said.

They include a wider variety of street scenes, "improved shop frontages" and replacing timber with flint.

Cllr Rose Burns, a criminal barrister and ally of Cllr Gottlieb, lost a motion to terminate the deal after arguing TH Real Estate missed a deadline in the contract. Council lawyers could not confirm whether the developer had technically started work on-site by June 1. Failure to do so would give the council grounds to end the contract.

Cllr Burns said: "We have the opportunity tonight to step down safely off that tightrope and finally comply with due legal process.

"We are now in a position to start afresh with a competitive tendering process in order to secure a new scheme for our city centre - the best scheme, on the best terms available, one that Winchester's residents will not only say they need and want, but one that they, and their children, and their children's children can be proud of."

Her amendment was defeated by 41 votes to 10.

But Cllr Gottlieb is poised to take further legal action against the council.

After the meeting, he told the Chronicle: "Until it's built, it ain't built, and we will carry on trying to prevent what will be a complete disaster for Winchester, even though my colleagues don't see it as a disaster."

Last week, Cllr Gottlieb threatened to seek injunctions against council's approval of the viability condition or use of compulsory purchase orders.

Asked what challenges he would launch, he said: "Everything is on the table."