Housing hopes dashed as plug pulled on £160m city scheme

The city council saw its attempt to secure funding through the private finance initiative rejected by the Homes and Communities Agency.

It means an end to plans to build 500 new "eco homes" on Orchard Park estate and refurbish existing properties, despite the city council having spent 1m of its own money working with residents to agree a design.

It is the third major funding blow to Hull in recent weeks following the axing of 30m funding for a home improvement scheme in the west of the city, and a request to find savings on its 400m Building Schools for the Future programme.

Hull North MP Diana Johnson, who represents Orchard Park, said: "Axeing the Orchard Park housing scheme is a betrayal of Orchard Park people by this Liberal Democrat-Tory coalition Government. This dire news sets the needs and aspirations of Orchard Park residents for better housing back for many years."

The man responsible for regeneration and housing at the Liberal Democrat-run authority, Coun Rick Welton, said: "I'm hugely disappointed, particularly because we have worked on very hard with residents to come up with a scheme that is acceptable to them.

"Changes and variations have been made to create a good scheme that people are happy with."

The council still plans to demolish the seven tower blocks on the estate.