THE future of a 600 home development has been called into question after the property developer that owns the site announced it was facing its toughest period in 20 years.

St Modwen, the commercial and residential property developer that owns the Littlecombe site on the land of the former Lister Petter factory in Dursley, hit the business headlines last week as they slipped into the red and admitted they were going through their worst period since 1990.

The company, which has seen £55 million wiped off its portfolio, has confirmed that they will still go ahead with the Littlecombe development, but that they will move forward "prudently" with the work.

Anthony Glossop, chief executive of St Modwen, said in his half year review: "What was not expected, either by us or the market generally, was the pace and severity of decline in the residential market, which has yet to find a stable level."

A spokesman for St Modwen said: "St Modwen's projects are, by their very nature, long term. It is often the case that markets will fluctuate over the lifespan of any given project and their timing and delivery is always managed accordingly.

"In the short term, we do recognise that we must now move forward prudently with our projects which will enable us to work through this difficult economic period. "However, our confidence in the long term remains undiminished, as does our passion for the delivery of all of our schemes across the UK - this includes Littlecombe, in Dursley."

Bloor homes, a national housing developer, are under contract to build zones A1 and A2 of residential housing in Littlecombe, however they have not yet submitted a planning application and the company said this week they have no date yet for when they will start work on the site.

St Modwen said that they cannot confirm when work will start on the site until Bloor submit a planning application. Stroud District Council has also confirmed that St Modwen has not yet received full planning permission for the site yet, although they expect it to be granted within the next two to three weeks.

The Littlecombe site is planned to have 600 houses, community facilities and a business park, which has already been completed. It was also tipped as the location for the new Health Centre for Dursley, however Gloucestershire PCT said they have not made any firm decision on where the health centre will be built.