PLANS to transform historic canalside weavers' cottages in Burnley into a luxury hotel are on the rocks, it was revealed today.

The admission by Liverpool-based developers Mill View Developments Ltd came as a Burnley councillor branded the vandal-hit 19th century Slater Terrace a "half million pound shell" and demanded to know just how much public money had been "wasted" on the scheme.

Coun Harry Brooks is calling for answers about the listed building and other high-profile Weavers' Triangle sites owned by Mill View Developments.

Although more than £500,000 of public funding has been put into improvements to the exterior, work has been at a standstill for years and today Mill View development director Ted Clumm revealed that two hotel companies, earmarked to take over the proposed £2.5 million 45-bed hotel had pulled out. "They have changed their minds about Burnley and we are struggling for a hotel user at the moment."

He said the company was now looking at alternative uses for both Slater Terrace and the conservation area Clock Tower Mill, which has been a burned out shell for a decade.

He said plans would be revealed in the next few weeks.

Mr Clumm added that the problems surrounding Slater Terrace revolved around the fact that English Partnerships, which provides funding for renovation work, had no cash allocation available for the North West at the present time.

Coun Brooks told councillors: "If the true story of the false starts, public money spent and time wasted went before the people of Burnley, there would be great concern."

He added: "I want to know just how much has been spent and why so much of it appears to have been aborted."

Today Coun Brooks said he was promised a full financial breakdown from the council but has received nothing.

Another critic of the Slater Terrace scheme former Burnley Civic Trust chairman Lynn Millard said he was not surprised hotel groups were not interested in the canalside development.

"I have always demanded a business plan for this scheme, because I have never believed it to be feasible - even if there was a hotel, no-one would stay there.

"It was always pie in the sky as far as I was concerned and, like the Clock Tower Mill farce, the council must shoulder much of the blame. Now both sites are just targets for vandals," he added.

Some years ago, Burnley announced it had put £50,000 into the Slater Terrace scheme.

In November 1997 Mr Millard received a letter from Burnley council's director of development David Brown, outlining spending on the terrace to that date.

It showed the council had spent £200,000 of European Regional Development Fund cash on the project, with a further £344,795 English Heritage grant - a total of nearly £545,000, all spent on the external shell of the building.

The letter added: "No public money whatsoever has been devoted to the building's conversion to a hotel."

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