The stores in the St John's Centre have been hit with the charge by their new landlords Grosvenor, of the Preston Tithebarn Partnership, the developers behind the city's £700m rebirth.

And the partnership has said that anyone looking to take up a store in that flagship development would also be expected to shell out for a policy.

Two independent traders in St John's Centre are insisting they will not pay it.

Lynn Scibetta, 50, closed the doors of the Continental Coffee Shop on Saturday after just over two years in the centre because the business was not making enough money to pay the bills.

The mother-of-two, who ran the business with her husband, John, said: "Do they think that because the Duke of Westminster owns it, he's going to come here and they're going to come and bomb it? How the hell can we survive when we've got bills like that to pay?"

Sue Ormesher, 62, who moved her craft shop business Papercraft from the indoor market to the St John's Centre almost three years ago, said she was asked for around £700 for terrorism insurance.

The grandmother-of-nine said: "I've not paid it.
"I checked with the Chamber of Commerce and they said we're the only people in Preston that have got to pay it. I was told, by law, we had to have it but I asked in the St George's Centre and they don't have it."

PTP project manager Richard Coppell, of Grosvenor's partner Lend Lease, said it was normal practice for its property to be covered.

He said: "It is standard policy that all centres managed by Grosvenor and Lend Lease are covered by terrorism insurance."

Frank McKenna, chairman of business group Downtown Preston in Business, said the £700 charge sounded "a little excessive", especially for smaller traders.

He said: "We have said all along that Tithebarn is still six years away and in the meantime I am sure the PTP wants existing businesses to flourish.

"I am not sure hitting them with charges like this will really do that."