A FLAGSHIP retail scheme for Darlington has been hit by an 11th-hour hitch.

The firm which was to develop a £90m shopping complex in the Queen Street and Commercial Street area has pulled out.

The scheme had been hailed as a key to transforming the town centre and boosting the local economy.

St Martin's Property Group was to have started work on the project early next year.

But this week the company announced it was putting the 6.42-acre site up for sale.

Darlington Borough Council said the move was a setback but insisted the development would still go ahead.

Council leader Coun John Williams said: "These things can happen when you are trying to bring about a development like this. There is still a lot of interest in our town from developers and we will continue to work hard to bring prosperity to Darlington."

St Martin's says it wants to focus on projects in London and decided on its move after receiving a speculative offer from another developer. This was turned down.

The news has been seen as a blow to Darlington's hopes of marketing itself as a major shopping attraction.

The chairman of Darlington Partnership, Alasdair MacConachie, said: "This is a classic scenario with developers who should stop messing towns such as Darlington about."

George Crowther, chief executive of the North-East Chamber of Commerce, said the move was highly regrettable.

"Darlington as a retail centre is very important and the Queen Street development was one of the key ways in which it was going to be improved," he added.

Queen Street centre manager Rory Fleming was unavailable for comment yesterday.