Dartmouth is faced with being stuck with a half demolished 'bombsite' in the centre of the town after plans for a £4m 'gateway development' broke down in a row over £150,000.

And if it can't be resolved, the town could lose the eyesore but end up with a 'dump' of an alternative flats complex instead.

The town has been living with the eyesore at the bottom of College Way for months after the former St John Ambulance station was partially flattened to make way for a contemporary concrete and glass complex of six riverfront luxury flats.

Now development boss Pat Brownett has revealed the planning application for the project is on hold because of an argument over the cash he is being asked to hand over as part of development consent.

South Hams planners say the developer will have to find £150,000 Section 106 money to pay for the impact of the new development – which covers contributions to things such as highways, education and even affordable housing.

Mr Brownett, who paid £1m for the site which he claims is now costing his company £70,000 a year in interest payments, said the entire scheme would become unviable if the company has to shell out £150,000.

He has employed independent valuers to try to prove his case and he said he is prepared to take the whole issue to appeal if the planners continue to insist on the full amount.

He warned that in the end he could be forced to build a differently designed block of flats which was granted planning permission years ago and which he himself condemned as 'a dump of a thing'.

For more, see this week's Chronicle