WINCHESTER City Council will consider relinquishing its power to buy land in Silver Hill if a proposed regeneration does not go ahead.

Plans to drop the scheme's embattled developer will be discussed at a meeting tonight, with the Liberal Democrat opposition calling to abandon TH Real Estate (THRE) immediately.

The Conservative administration has pledged to end its contract with the firm unless they set the project in motion by February 9.

Officers have also recommended letting a compulsory purchase order (CPO) expire if the scheme does not go ahead, waiving the council's right to buy the land.

Using those powers would give civic chiefs greater control over a new project.

But it would cost the council £15 million, according to new estimates - more than half its usable reserves.

It is unclear whether the council plans to seek a fresh CPO.

THRE has U-turned on its commitment what is known as the 2009 scheme, which includes shops, homes, a bus station and 100 affordable flats.

Cllr Lucille Thompson, Lib Dem leader at the council, said: “It’s now clear that the developer no longer intends to deliver the scheme that was agreed last summer – with a bus interchange, with social housing and with an improved design.

"Our view is straightforward – with no bus interchange and no social housing, there’s no deal.”

Whether the Tory-dominated council backs the Lib Dems or rubber stamps the administration's timeframe, THRE would be given an extra 20 working days to put the plans through before they are dropped for good.

Earlier this month the threat of termination sparked a row between council and developer, who have been partners on the scheme for five years.

THRE said it had spent £10 million on the project to date and accused the council of being "unreasonable".

The council hit back with accusations that the company had produced an "inaccurate and selective chronology of events" in order to confuse councillors.

THRE chief Mike Sales has also raised the prospect of legal action against the council, claiming the ultimatum breached its obligation to act in good faith.

Councillors were given a confidential briefing on the scheme on Monday night, containing legal advice behind the recommendation to waive the compulsory purchase powers.

Full council's recommendation is set to inform a final decision on the way forward at cabinet on February 10.