DEMOLITION work has begun on a disused bus station as part of a plan to regenerate a former mining town.

But a multi-million pound development in its place has been delayed.

Bulldozers moved in this week to tear down the dingy brickwork shelter in Stanley that is now in the shadow of a £4.3m modern interchange.

The site has been earmarked for development to create a sophisticated £17m health centre for Stanley and the surrounding areas.

But Derwentside District Council said last night it had hoped that phase two of its £16m scheme to reinvent Stanley as a shopping destination would be further on by now.

It wants to create a widened pedestrian-only walkway to link Front Street with the new bus station to create a flow of shopping traffic to the stores.

The council has issued compulsory purchase orders to six businesses still using the properties identified for demolition.

But the process has been delayed after three complaints and a public inquiry, led by estate agent Stephen Bennett, owner of NS Bennett.

Derwentside council leader Councillor Alex Watson said he had hoped the breakthrough would be completed by now.

He said that, now, it could be as much as six months away, and the delay is costing the authority thousands of pounds as the costs of materials and labour rise.

Coun Watson said: "It is very frustrating, because we wanted it to be ready in the New Year.

"We consider the creation of the walkway critical, because it will encourage people to use the shops and the bus station and there is a push to encourage people to use public transport at the minute.

"It is a very, very expensive process, but we are committed to the regeneration of Stanley town centre and that is what people want."

The public inquiry is being overseen by the Office of the Deputy Prime Minister (ODPM).

A spokesman for the ODPM said: "A decision on the compulsory purchase order is imminent, and Derwentside District Council can expect to hear the result any day now."

Derwentside Primary Care Trust is not expected to be ready to use the former bus station site until next April, so the land will be used as a car park until then.