A LANDMARK development scheme worth £37m has been thrown into jeopardy after its developer pulled out due to the credit crunch.

The New Cross Gate Community Centre is due to be built on a 0.9 hectare area surrounded by New Cross Road, Briant Street, Wynne House, Bower House and Besson Street.

Three blocks, including 172 flats, an eight-GP health centre, public library, gym, creche, cafe and pharmacy, are planned to take the place of council housing which has already been demolished.

Work on the project was due to begin last July, but no construction has been carried out so far.

Now a question mark hangs over the scheme’s future after developer The Rydon Group pulled out, blaming the current financial crisis.

Kirsten Downer, of Coldblow Lane, New Cross, says the facilities offered by the proposed centre are vital for the community.

The 37-year-old said: “It’s a shame for New Cross that this has happened.

“We are lacking decent community and green spaces, so it’s a bit depressing.”

The project is a central plank of the New Cross New Deal for the Communities (NDC) programme, a Government scheme to regenerate the area.

It was set up using £45m in Government money to work alongside residents, community groups and other organisations to improve the area over a 10-year period.

Malcolm Bacchus, chairman of New Cross community group the Telegraph Hill Society, says if the centre isn’t built it will be a sad day for the people of New Cross.

He said: “The centre would be a huge boost to the morale of the community.

“Most facilities offered by the centre are already available in the borough but are tired and very old, so those new facilities are needed.”

A spokesman for the developer said the pull-out was because of a decline in property values which meant it was unsure whether it would be able to sell the private homes.

The development is to be handed over to the New Cross Gate Trust charity when it is completed.

Chief executive Clive Wilson said: “The council have advertised for a new developer and are interviewing seven candidates on January 20.

“We hope that the essential nature of the scheme including the design and main community uses will stay the same.”