A four-way battle has emerged over one of the key areas pencilled in for the regeneration of east London's Thames Gateway.
The result is that the development of the Barking Reach site has stalled because of the differences of opinion between the local council, Bellway Homes, the Docklands Light Railway and the Greater London Authority.

The site is considered vital to kickstart the regeneration of the Thames Gateway, which deputy prime minister John Prescott believes is essential to tackle the housing shortage in the South-east.

The disputes centre on the construction of a PFI-funded secondary school and the density of the planned housing development. If these two issues are not resolved rapidly, they could lead to greater delay.

This would put at risk the progress already made on the scheme, where the early stages have been developed and only the detail of later phases remains to be finalised.

On the school issue, Barking and Dagenham council wants Bellway to give it an 11 ha site at Barking Reach to develop a PFI school, which is central to the overall project. Bellway has yet to cede this land and it is believed that the council would be unable to go ahead with the PFI deal if it is unable obtain the site from Bellway in the next few months.

The whole thing over density and transport is a chicken-and-egg situation

Source close to Barking council

Bellway is also in talks over the density of housing in the overall masterplan. London mayor Ken Livingstone wants 10,000 new homes as opposed to the 6000 initially pencilled in. Bellway will only agree to the higher figure if it receives a guarantee that the Docklands Light Railway link will be extended to Barking.

But the DLR will only agree to construct a station at Barking Reach if high levels of housing, and therefore potential passengers, are guaranteed.

Project observers believe this disagreement is creating a hiatus that is hindering the deal to give Barking council land for the PFI school. A source close to the council said: "The whole thing is a chicken-and-egg situation. The DLR is reluctant to go to Barking if it doesn't know sufficient housing is going to be there. Bellway seems reluctant to hand over the land for the school until the density issue is sorted."

A spokesperson for Bellway Homes said: "Bellway is fully committed to the delivery of the site for the Jo Richardson school. Negotiations with the council have been under way for some time and could be concluded in the near future." The spokesperson added: "We see the minimum development will be 6000 houses and the maximum will depend upon the infrastructure available during the lifetime of the project."