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Berkeley Homes has reached a heads of terms agreement with Southwark council over its controversial plans for 374 homes on the key Potters Field site next to City Hall and Tower Bridge.

Berkeley and Southwark say they have now come to basic agreement on the price of the scheme, designed by architects Squire & Partners after an earlier scheme by Ian Ritchie was dropped.

The heads of terms agreement will be submitted to Southwark鈥檚 council executive for approval, and provides the basis under which development will push forward.

As well as homes the scheme will include an area dedicated for cultural use. Councillor Nick Stanton, leader of Southwark council, said: 鈥淭he agreement of heads of terms would represent an important milestone, laying the financial foundations for the project.

鈥淲e started consulting on our plans over a year ago and have listened to the opinions of interested local community and business groups. The council鈥檚 scrutiny committee has had a close look at the heads of terms and I now look forward to hearing the feedback from the Executive.鈥�

The provisional agreement follows on from years of wrangling over the site, which is part owned by Berkeley, part owned by Southwark council and part owned by the City of London corporation. The earlier scheme was supported by former mayor Ken Livingstone in the face of opposition from Southwark. Berkeley finally withdrew the Ian Ritchie scheme because of the council鈥檚 opposition, despite winning a planning appeal and Livingstone threatening to use his mayoral powers to compulsorily purchase the site from Southwark.