Woking Borough Council has paused a regeneration project involving 1,142 new homes after it issued a Section 114 notice in June.
In 2017, the council announced its plans to work with ThamesWey, a company it established, on the Sheerwater regeneration scheme.
The scheme intended to deliver the homes and associated community infrastructure over nine years.
The local authority has also said it expected ThamesWey to be in £185m of debt when the construction phases that were already underway were completed, increasing to peak debt of £361m by the end of the scheme.
Cllr Will Forster, portfolio holder for the Sheerwater project, said: ‘In light of the council’s significant financial challenges and the need to reduce our borrowing, we have decided to end our current development agreement with Thameswey and are looking into alternative ways of completing the project.’
Cllr Forster said Thameswey would continue work on the three phases of the scheme that had begun.
The council said plans for the rest of the site were subject to review and said it would ask residents for their views over the summer.
Options include redevelopment by housing associations or private developers, or refurbishing and reletting the existing homes, the local authority has said.
If this article was of interest, then check out, 'Preventing future Section 114 notices.'
