John Lewis pulls out of Preston Tithebarn

The retailer has decided it no longer wants to anchor the proposed £700m scheme in Preston city centre, leaving the local authority to look at other redevelopment options.

John Lewis planned a department store on the site of Preston bus station, but the future of the site is in doubt.

A John Lewis spokesperson said: "John Lewis can confirm it has withdrawn from discussions with Lend Lease on the Tithebarn development."

The announcement follows the one made on Wednesday by the retailer about plans to open a £15m department store in York.

Marks & Spencer, however, is still committed to the plans in Preston despite the council confirming the 1.5m sq ft Tithebarn development will not go ahead as it is no longer financially viable as a result of John Lewis's decision.

As well as a new bus station, developer Lend Lease planned revitalised Preston Markets, a new cinema, cafes, bars as well as new offices and homes.

Cllr Peter Rankin, leader of Preston City Council, said: "We are in the middle of one of the worst economic and financial situations since the 1930's and it is now clear that the large scale comprehensive Tithebarn scheme, that received planning permission as originally proposed, is financially unviable. The world has simply changed and we have to move on and be realistic about what can be achieved.

"Our aim is though is to still re-generate the Tithebarn area of the city. Our development partner Lend Lease, is working with us to rethink the proposals for Preston City Centre, and together we are exploring how best to achieve the city's ambitions to offer a wider range of quality shopping, more leisure and mixed use of the city centre including new offices and homes.

"The opportunity that now presents itself means that we can review all our buildings and assets in a new way. There is strong interest in Preston, both inside and outside the Tithebarn area and we are talking to a number of parties about how we can take the city forward.

"We are also united with our partners Lancashire County Council and Preston Vision Board to explore all development opportunities for Preston. So even though we will not realise our ambitions through the Tithebarn scheme as was originally proposed, we are optimistic about the future and are confident that in time Preston will benefit from new investment and future development."

The decision to look at alternative plans to redevelop Preston city centre is welcomed by some in the business community.

Frank McKenna, chairman of Downtown, said: "The sooner the council starts to come up with alternative plans the better. Although I hate the bus station, it would be a much cheaper option to utilise the bus station than relocate it.

"The council needs to look at how to the make the bus station more 'user friendly' than it currently is. It made sense to relocate the bus station within a £700m scheme because relocating it is massively expensive.

"All planning is in place for redevelopment in Preston. A more peaceful approach would be to develop pockets of Preston and there are lots of things that could happen."

Lend Lease became the sole development partner on Preston Tithebarn in 2009 after Grosvenor decided to pull out of the scheme.

Preston City Council has also faced legal challenges over its plans. An independent public inquiry was held in May and June last year on whether or not the Preston Tithebarn Scheme should be allowed planning permission.

The inspector recommended refusal on the grounds of increased traffic congestion. Pickles overruled the recommendation in December 2010 and said consent should be granted.

Blackburn with Darwen Council decided to appeal this decision and lodged an appeal at the Court of Administration in Manchester. The court hearing took place on 27 and 28 June when the appeal from Blackburn Council was rejected, upholding Pickles' decision.