Plans for a housing scheme in Shrewsbury have been shelved, it was revealed today. The former Tesco in Arlington Way has permission for 101 homes.

But the scheme, which includes affordable housing, has been plagued with problems.

Two developers have pulled out of multi-million pound deals to buy the site and Shrewsbury and Atcham Borough Council leaders have now said it is likely the land will not be sold and will instead be passed on to the new unitary council as an asset.

Council leader Councillor Peter Nutting said: “We have been talking to various building companies over the last few weeks but I think it’s unlikely any deal is going to be done in the short term.

“I would be surprised if a deal gets done before we end up as a new council.

“All any firm has got to do is produce a cheque and get on with it but most of the building companies are struggling for cash. It is likely to be transferred to the new council as an asset rather than actual cash.

“Whilst we don’t like to see empty sites around that is just one of the realities of the credit crunch.”

He added the land was valued at about £6 million and the council was not prepared to accept less for a quick sale.

Teams moved in to bulldoze buildings at the site earlier this summer in a bid to attract more developers and stop it becoming a target for vandals.

Plans by the borough council to sell the site to property company Morris Homes for £6.75 million fell through earlier this year. An £8 million agreement with David Wilson Homes also fell through.

An update report is due to be prepared for the council’s cabinet committee on September 1.