The Falkirk Gateway proposal was to build offices, retail outlets and leisure facililities on a 150-acre site to the east of the town.

But this week it was revealed the credit crunch has left developers Macdonald Estates, which is working in partnership with The Royal Bank of Scotland, unable to deliver the original scheme.

Now Falkirk Council has been forced to delay the project by up to two years.

Council leader Linda Gow said she was "bitterly disappointed" at the hold up but was confident work on the Gateway would begin by the end of 2010.

However, SNP group leader, Councillor David Alexander, accused the administration of dragging its heels over the development.

He added: "I'm not surprised but it is very frustrating. Macdonald Estates cannot deliver yet we are crying out for office accommodation in this area.

"We were told the first phase of offices and retail would be an 'easy hit' but nothing is happening. We're told there is a market out there
but we're not tapping in to it because we don't have the premises."

Members of Falkirk Council's powerful policy committee were told in a closed doors meeting on Tuesday that the developers had been unable to deliver an anchor store for the first phase.

A confidential report obtained by The Falkirk Herald revealed: "The current economic situation has materially affected the viability of the Falkirk Gateway development proposals as they currently stand.

"The scheme as originally envisaged cannot progress in the current economic climate in view of lack of sufficient retailer commitment and the developer's inability to fund the scheme due to the current uncertainty within the property investment market.

"In such circumstances, it is likely that progress on the project will be delayed, potentially by up to two years or more if re-marketing were to take place."

Councillor Gow said: "The contract put in place by the previous administration was coming to an end and we have decided to extend that.
The type of anchor store the developers were hoping to get are the ones which are experiencing a slowdown."

She added that after meeting with Dan Macdonald, the developer's chief executive, she was reassured.

The council leader said: "He has given me an assurance that the company is still stable and there is no economic uncertainty."

Development manager Niall McLean said: "Macdonald Estates and RBS remain entirely committed to delivering the project despite the difficulties in the current economic climate.''