THE redevelopment of the centre of Devizes has been dealt a devastating blow after Heritage Commercial Properties withdrew from an agreement with Kennet District Council.

Councillors at Tuesday policy and finance committee meeting were astonished to hear the developers had pulled out after more than three years of negotiations and after Heritage signed an agreement with Kennet in August to develop the North Gate site in the centre of Devizes and the Broomcroft Road site in Pewsey.

The district council will now have to find a developer willing to sympathetically refurbish the centre of both rural market centres .

Ron Crook, Kennet's director of community services, said: "We are all very disappointed. It was not for want of trying that we failed to reach agreement with Heritage."

It is felt that the county council's championing of a new Heritage Centre, including the County Records Office, on the Wharf that began to unravel the plans that Kennet officers had spent months drawing up with Heritage for a combined development of the North Gate and the Wharf, including enough residential development beside the canal to make it economically viable for the developers.

Coun Jerry Willmott, the leader of Kennet District Council, said: "We would have been mad to turn down the original Record Office plan as it included the collection of the Royal Photographic Society.

"Unfortunately, the Heritage Lottery Fund would not wear that and at that point I think things began to unzip."

Council officers were involved in protracted negotiations with Heritage, coming to an outline agreement to develop the Broomcroft Road site in Pewsey, which included more housing. But in the current financial climate Heritage decided to pull out .

Miles Ashley, Heritage's managing director, said: "Significant changes have arisen since our appointment as preferred developer, in particular the removal of the Wharf from the scheme, the general economic climate and, most recently, Kennet's desire to make further changes to the scheme established with them in mid-2001.

"These issues have substantially affected the progress and viability of the project."

Mr Crook said: "We do not blame Heritage. They are a commercial company and have to make decisions on a sound economic basis."

Kennet has already drawn up a timetable for finding a new scheme for the North Gate site. It hopes to have a final report prepared for next July, ready to market the site again next autumn.