Colchester's MP says he is worried about a setback in the multi-million pound deal to develop Health authority land for housing, jobs and roads.

After some delays, contracts were expected to be signed by the Department of Health this spring to sell land to the north of the town.

But the NHS has confirmed it is looking at the whole issue of land at Severalls Hospital, Turner Village and the old Myland Hospital site again.

Colchester's Lib Dem MP Bob Russell said he feared if new developers came into the picture they might not be as sympathetic to the history and architectural features of the Severalls site.

In 1998 an agreement was reached between the NHS and developers, believed to be Beazer Homes, but no contracts signed.

Mr Russell said: "I'm concerned about this because Beazer Homes were fully on board to retain the main hall at Severalls, and would have conversions wherever possible of existing buildings, and retain the central playing fields as a feature of the new development.

"What concerns me is will others be as understanding?"

The agreement two years ago gave Beazer the Myland Hospital site and land to the west of the general hospital - which has planning permission for housing - plus the option to acquire part of the Severalls site and Turner Village.

John Hooper, property development manager for the eastern region of the NHS, said: "Because of the passage of time we will probably be looking to go back out on the market."

But Alan Head, managing director of Beazer Homes Colchester, said: "We have been in discussion with the NHS for some time now over the purchase of the Severalls Hospital site and are, naturally, very keen to conclude a swift completion to those negotiations."

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