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A delayed 鈥渕illennium project鈥� regeneration of the centre of Slough seems to have hit the buffers after the local council withdrew its support.

Development Securities, the 10-year regeneration scheme's developer, told the stock exchange this morning that the council had decided not to proceed with its new headquarters, which was to anchor the scheme.

The development, which was to include 1,500 new homes and 34,500m² of new offices, has already been hit by the withdrawal of housebuilder Berkeley Homes, which failed to reach agreement with the landowner.

National regeneration agency English Partnerships, which had committed 拢17.5m of public money to the development, submitted an outline planning application in September.

The announcement came as Development Securities admitted in an interim management statement that it will have to revalue its existing property assets.

Shares in the firm fell almost 6% in early trading as it confirmed a gloomy prognosis for trading prospects.

Chairman David Jenkins said: 鈥淭he current market conditions are probably approaching the worst in living memory, with the uneasy expectation that the storm is a long way from over.鈥�

He added that the 鈥渧irtual non-availability of bank finance鈥� in the credit crunch has denied investors cash for new property acquisitions, and that 鈥渃onsequently the property investment market may not reopen for normal business until investment returns are adequate to compensate cash buyers for the perceived risks involved.鈥�

This means yields are likely to have to rise further, pushing down the value of commercial property, said Jenkins.