Blow as £13m industrial estate scheme axed

Regional development agency Yorkshire Forward had agreed to buy 20 hectares at Shepcote Lane from stainless steel firm Outokumpu to develop a business park for advanced manufacturing and hi-tech companies.

The decision to scrap the scheme comes on top of the 44m of cuts already proposed by Yorkshire Forward as the Government desperately tries to rein in spending.

Jan Anderson, a director at the agency, described the coalition's decision as "disappointing for Sheffield and for the wider manufacturing industry of Yorkshire and Humber".

She added: "We believe that there is still a strong business case for the site to be developed into a business park for the manufacturing industry, particularly in building on the success of the Advanced Manufacturing Park in Rotherham.

"However, we also understand that Government is undertaking difficult decisions in order to pro-actively respond to the current budget deficit."

Mark Perrins, senior vice president at Finnish-owned Outokumpu, said the deal with Yorkshire Forward was agreed earlier this year, although the agency had later warned him it might not go through.

He said: "It is for sale again and we will be actively marketing it. We did have interest from other people, not just Yorkshire Forward, but we went with them because it seemed like a good option at the time."

The site is next to Meadowhall off the M1.