Assetz plc wanted to put up an eight-storey building with 45 flats and two floors of offices in Guildhall Street.

The Cheshire-based firm hoped to demolish an empty building and put the £6m development, aimed at first-time buyers, in its place.

But it has now withdrawn a planning application after Preston Council planning officers advised they would recommend it be refused.

Patrick Seed, development director at Assetz, said unless an agreement could be reached, the site would remain derelict.

He added: "There are only limited design changes we can make before the project will become unviable.

"We would hope the council will adopt a 'bigger picture' attitude, in order to encourage development and regeneration in the city centre."

Assetz had been confident the project would get the go-ahead after previous site owners were given planning permission for a seven-storey, 104-bed hotel on the same spot two years ago, though the development never went ahead.

The firm had hoped to begin work on the apartments in the autumn.

A spokesman for the council said: "The reason it was recommended for refusal was concerns over the design and overall size."

Town centre councillor Michael Lavalette believes there is great demand for social housing in Preston.

He said: "There has been a rush of companies trying to build single people flats and, in the present climate, they might be struggling to sell."



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