THE redevelopment of a derelict barn into a £1million luxury homes complex is on hold after being caught up in a planning dispute.

Planning officials said the barn at Broughton Barn Farm, Haslingden Road, Oswaldtwistle, has become technically a new building after more than 30 per cent of it was demolished and rebuilt.

Hyndburn Council has said that in order to continue with the project the applicant will need to submit a new planning application for the three homes.

But there is a restriction on new residential properties in Hyndburn.

Now a building contractor who was instructed to do the demolition and rebuilding work for applicant Broughton Barn Farm Limited claims he has been left thousands of pounds out of pocket.

The problem came to light when planning officers from Hyndburn Council visited the site and said there had been more rebuilding work than was agreed. Brendan Lyons, chief planning officer at Hyndburn Council, said: "It came to our attention that quite a lot of rebuilding was taking place.

"Because more than 30 per cent of the building had been re-built it is classed as new build and, therefore, the existing permission has been breached.

"The project is on hold while the developer is trying to agree what is the way forward."

John Oxley, whose East Lancashire-based firm North West Design and Build, was contacted by the applicant to do the demolition and re- building work, said: "We had drawings to rebuild the barn and gave the applicant a price for the work.

"Then we were told the applicant did not have planning permission for the amount of rebuilding work which took place."

Preston-based De Pol Associates Limited, a planning and development consultancy firm retained by the applicant, is now in negotiations with Hyndburn Council to try and resolve the matter.

Paul Walton, of De Pol, said: "We are involved in negotiations with the planners to resolve the scheme in everybody's best interests.

"It would be unfair if the site remained in its current state because the development is partially complete."

Hyndburn Council leader, Peter Britcliffe, said: "The Government has tied our hands here in Hyndburn by saying we are not allowed to rebuild.

"This policy is being forced upon us and it is ridiculous."

Broughton Barn Farm Limited, or Mr G Holding, the individual listed on the planning application, could not be contacted for comment.

The developer in charge of the project, Yorkshire-based Blue Sky Property Group and Preston-based architect the Frank Whittle Partnership were also unavailable for comment.

It is thought the completed properties would be worth around £300,000 each.