DEPUTY Prime Minister John Prescott has rejected plans for almost 170 homes on the outskirts of a run-down town centre.

Derwentside District Council approved proposals by Bowey Homes and Dunelm (Castle) Homes to develop Station Fields, at Kip Hill, near Stanley.

But Mr Prescott called in the application and a public inquiry was held in April and the inspector recommended that the scheme should be given the go-ahead.

But Mr Prescott has overruled the inspector, saying that noise from a nearby industrial estate and the amount of parking space proposed are sufficient problems to block the development.

The Labour-run council saw the scheme, for 169 three and four-bedroomed houses, as a boost to its hopes of regenerating the town, which is still suffering following the decline of the coal industry.

Mr Prescott said in a letter to the council that some of the homes would be "unattractive" because their owners would not be able to open the windows at night because of the noise.

"This is a matter which raises a serious concern about the ability of the development to fulfil the objective of attracting people to come and live in the Stanley area."

Principal planning officer Darren Cuming will tell the council's development control committee on Thursday that the developers, who are studying Mr Prescott's ruling, may be able to address the reasons for refusal.

He will tell councillors that "it is likely an amended application will be submitted to develop the site in the future".

Mr Cuming says in his report that there were no objections to the principle of developing a greenfield site to help the town's recovery.

"It was considered that there was a need to develop the site to aid the economic regeneration of Stanley."