A complex development project including a new Colchester United stadium, link road and business park has suffered a setback.

The long-standing scheme rests on many parts of a planning jigsaw - including council-owned land at Cuckoo Farm and NHS land at Severalls Hospital - all falling into place.

But today (Friday) the Government revealed it had no plans to market the Severalls Hospital land for house building until at least autumn 2001 or even spring 2002.

Colchester MP Bob Russell said the news was a "bombshell" and it put the whole project for north Colchester into turmoil.

The Cuckoo Farm land is meant to be used as a business park, creating jobs, and to house a new Us stadium.

It cannot go ahead unless houses are built on the Severalls site and the last phase of the Northern Approaches access road is built.

Mr Russell had asked health secretary Alan Milburn when the sale of the former psychiatric hospital would be completed.

In reply health minister John Denham outlined the timescale and confirmed the site was not currently being marketed.

Mr Russell said: "It is a huge setback in terms of job creation, better transport links and hopes of a new stadium for the Us."

Colchester Council leader Bill Frame has called for an urgent meeting with all local political parties and the health minister to get him to reconsider.

Mr Frame said: "We had been led to believe in our contacts with the health authority and their agents that they were proceeding with the development of Severalls and no mention had been made of this sort of delay."

However Colchester Council's head of estates Steve Clarke said he was much more optimistic of timings and hoped the NHS would submit a planning permission later this year.

The NHS today said they were were not in discussion with developers but there was no delay they were just waiting to agree some points with the council before they could draw up a planning application.

No-one from Colchester United was available for comment.

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