Centros' major mixed-use regeneration project along the Canal Corridor site in Lancaster has been called in for a public inquiry after objections by English Heritage and other protestors.
The scheme, approved by Lancaster City Council in October 2008, would include 427,000 sq ft of retail and catering, anchored by a 97,500 sq ft Debenhams, the city's first department store. There would also be an 800-space car park, town houses and flats, a new park, two refurbished theatres, offices and highway upgrades.
Centros, owned by Delancey, faced opposition from the strong Green party in the historic city since the council picked it for the site in 2005.
A first application in 2007 was withdrawn and revised reducing the size of the scheme and improving highways work.
A statement from EH said today: "English Heritage welcomes the decision by the Secretary of State to call in the Lancaster Canal Corridor scheme. In asking the Secretary of State to call in the planning application, English Heritage drew attention to the irreversible damage the proposed development will cause to the historic city and that, if implemented, will see the demolition of many historic buildings and their replacement with a scheme entirely alien to Lancaster's character."
EH's complaint centres on plans to demolish several buildings at the edge of the scheme on Stonewell to make way for a pedestrian bridge linking into St Nicholas Arcades and the city core. The buildings are not listed but are within a conservation area. Centros says the buildings have no merit and the scheme will be hampered without the bridge.
Centros said if EH succeeds at the inquiry "the result could be catastrophic for Lancaster, and it's quite likely that the site will be blighted for decades to come."