BLACKBURN with Darwen council bosses have defended their opposition to a massive expansion of Preston City Centre after the scheme was dealt a shattering blow.

Developer Grosvenor has pulled out of the £700million Tithebarn project, saying it wanted to focus on smaller schemes.

Other bodies that are involved with the scheme have vowed to press on with the project, which will be the subject of a costly public inquiry in the coming months.

Along with Blackpool, Blackburn with Darwen Council has bitterly opposed Tithebarn, and the town hall sparked fury from Preston bosses when it wrote to local businesses urging them to protest against the plans.

Blackburn with Darwen Council has claimed the scheme will overshadow its own regeneration ambitions, notably the £66million shopping centre being built in the town centre.

But today bosses gave a guarded response to the major blow to the project.

Council leader Mike Lee said: "We have been arguing from the start that the sheer scale of this development was not feasible in the current economic climate.

"We had hoped to see a scaled-down development which minimised the impact on other areas in Lancashire.

"It is important, however, that all councils in this area continue to work together to ensure investors see the benefit Lancashire has to offer as a whole."

In a statement, John Irvine, executive director for development at Grosvenor said: "Following a strategic review Grosvenor is refocusing its development activity on building a larger portfolio of medium-sized, retail, residential, and mixed-used projects rather than concentrating on a few large, long-term, city centre regeneration schemes."

And in a joint statement, Preston council's leaders said: "Although we are naturally disappointed with Grosvenor's decision we understand their reasons.

"We are pleased that Lend Lease are still on board and are looking forward to working with them to bring Tithebarn to fruition."