A MULTI-MILLION pound city centre development has been dealt a fresh blow after gypsum deposits were found on the site.

The news comes only days after English Heritage announced it had dropped objections to the proposed £10m development of a supermarket, shops, apartments and car park on a rundown site near Ripon Market Place, in North Yorkshire.

Developers had hoped for an early start after Deputy Prime Minister John Prescott decided not to call in the planning application .

But gypsum was discovered after Harrogate Borough Council called for a ground stability report because there are known to be deposits which can lead to subsidence in the area.

Harrogate Borough Council planning officer Mike Warden said the developers were aware of the situation but remained optimistic. "They were not saying they would run away from the problem," said Mr Warden.

"In fact their message was that they have got a problem but were determined to overcome it."

The problem came to light when geo technical, structural and mining consultants carrying out a partial survey of the area identified gypsum and minor subsidence on the central and western parts of the site.

Mr Warden said the area where the gypsum had been identified was earmarked for retail use.

The site has already been earmarked for a Booth's supermarket and the whole project will pave the way for an inner bypass which would see major improvements at the Coltsgate Hill junction with North Street.

A car park on the site would cope with almost 200 vehicles.