THE Silver Hill scheme hangs in the balance after its developer conceded it was unlikely to proceed with its current plans.

Bosses at TH Real Estate (THRE) have written to Winchester City Council saying they "do not expect" to go ahead before a crucial deadline, a meeting heard.

Meanwhile, a long overdue report into the council's unlawful handling of the scheme has moved a step closer.

Council leader Stephen Godfrey told a meeting last night that THRE have indicated they "do not expect to make the scheme unconditional [guaranteeing it will go ahead] by the time the compulsory purchase order expires on the 19th of March this year."

They "do think it might happen," he added.

Failure to implement the order in time, allowing the council to buy the necessary land, would appear to kill any chances of the scheme going ahead this year or with a bus station and 100 affordable flats.

As reported by the Chronicle, planning permission expires in February, further heightening the risk that the current regeneration, known as the 2009 scheme, will not go ahead.

The council has called a special meeting on January 28 to discuss the scheme's future.

"While there has been much activity by the developer on the planning application, none of the planning conditions have been signed off and the agreements with the housing provider and the funder have still not been signed, finalised," Cllr Godfrey added.

The developer, commonly known as Henderson, is trying to revive a controversial version of the plans which swaps the bus station and discount housing for more retail space.

It will battle to restore the quashed plans, the so-called 2014 scheme, at a court hearing in May.

The developer's message comes in response to an approach from a frustrated Cllr Godfrey, who bemoaned the lack of progress at a meeting last month.

The letter will be published as part of a public report to be presented to cabinet next week, Cllr Godfrey said. He said the council received it "in the last few days" and had yet to obtain legal advice.

The Chronicle has approached THRE for comment.

In a separate development, the meeting was told under-pressure Claer Lloyd-Jones has prepared a draft of her delayed review into the scheme.

It is now more than six months late, but Cllr Godfrey ducked calls to set a publication date, saying the council has no control over the independent process.

Ms Lloyd-Jones, a solicitor, is investigating decision-making which led to the £165 million regeneration scheme being unlawfully kept from commercial tender.

Cllr Godfrey said: "I understand the chief executive has been asked by Ms Lloyd-Jones to provide factual comments on a draft of her report.

"It is for her to decide when she is ready to submit the final version,"

Answering a written question from Cllr Brian Laming, he pledged to release the costs of the review to councillors "as soon as those costs are clear".

It also emerged that the council could take a financial hit when THRE appeals the ruling that its preferred version of the scheme was unlawfully handled.

The council will not have to pay any legal costs but such bills could "reduce the scope for the council to share in the profit if the scheme gets built," Cllr Godfrey said.

Cllr Rose Burns withdrew a planned motion for the council to scrap its deal with THRE, saying it would pre-empt the newly-announced meeting.