Property group Town Centre Securities (TCS) said main construction on the 1.1 million sq ft site is not expected to begin before the end of 2009, "and this timetable remains under review in the light of market conditions".

The Eastgate development would include a major John Lewis store and a Marks & Spencer's, a mix of shops, 600 homes, parking spaces and a new public space.

Last week joint developer Hammerson said: "We anticipate that it is unlikely that main scheme construction will commence before the end of 2009."

Leeds-based TCS said instead of new developments, its sole focus will be on protecting resources and preserving capital.

"We are nearing the end of our current refurbishment programme and will not commence any further development work until we are confident that the environment for property investment has materially changed," it said in a statement covering the year ending June 30.

TCS added work on a high-profile office development at 1 Whitehall Riverside in Leeds is unlikely to start despite potential tenant interest.

"In the current environment it seems unlikely that there will be progress in the short term and no development would commence without a significant pre-let," it said.

Edward Ziff, chairman and chief executive, said: "It is a time for consolidation.

"The defensive quality of our portfolio, with a diverse spread of tenants, will stand us in good stead.

"Our robust and secure financing arrangements continue to provide a stable foundation for our business. Our focus is on protecting our resources and conserving capital, to ensure that we will be ready to take advantage of opportunities which emerge as the investment and development markets show signs of recovery."

TCS added despite "extremely challenging" conditions, it is progressing in line with expectations. It said its position is unchanged, and it is well positioned to take advantage of bargains that emerge when the market reaches the bottom of the trough in 2009.

In October and November it has sold two retail properties in York for a total £6.5m and is due to exchange contracts on a third York property in December for £1.5m.