STORE chain Tesco is looking at alternatives to a former North-East brewery site on which to develop.

Should a suitable option emerge for the Vaux site in Sunderland, it could end a long-running wrangle over the prime 15-acre city centre site, which has remained derelict since the brew- ery closed in July 1999.

Tesco bought the site in February 2002 and put forward plans for a superstore, as part of a larger development, several months later.

Wearside's new regeneration group, Sunderland arc, subsequently unveiled its own plan for the site.

Development agency One NorthEast said last year it may consider seeking a compulsory purchase order for the site.

Tesco later outlined amended plans for a £150m development featuring shops, leisure facilities and homes, but Sunderland City Council said it was minded to approve Sunderland arc's proposals, which included offices, apartments, a public square and a footbridge over the River Wear.

The site development is now in the hands of Government ministers following referral by the Government Office North-East (Gone).

A Gone spokeswoman said it was hoped a decision would be made soon.

News of a possible breakthrough between Tesco and the arc group emerged after a recent meeting between officials from both groups.

Tesco said it was examining alternative unnamed sites for development in Sunderland and, if successful, it could sell the brewery land.

Property director Philip Coles said: "We hope that one of these alternative ideas will help speed up the development of this site, which we know is what the people of Sunderland want."

Arc chief executive Tom McCartney said last night: "It was a low key meeting and we are pleased Tesco is looking at other sites.