Plans for a new £8 million film production studio to open in a Grade II listed power station have been scrapped after the council agreed to sell off the asset.

The company behind the scheme, Mo-Sys Engineering, said it was ‘surprised and disappointed’ by the council’s decision to sell the site.

The special effects company had been working alongside the council for three years to develop the disused Plumstead Power Station into a new global hub for its virtual productions.

A spokesperson for the company confirmed to the Local Democracy Reporting Service (LDRS) that Greenwich Council said it was pulling out of the project in August this year.

They added that a Freedom of Information request the following month seemingly revealed the authority’s funding it had reserved for the scheme was no longer available.

Greenwich Council had agreed in February 2022 to provide over £4m to the project, more than half of which would have been garnered from financial contributions obtained through developers building in the borough.

Mo-Sys would have reportedly matched the council’s funding for the project, bringing the total for the scheme to over £8m.

The space would have included an 8-stage studio facility, an education and training service and a hub for further innovations in the virtual production space.

The company is currently based in Morden Wharf but the studio is set to be demolished ahead of a scheme to deliver 1,500 new homes to the area.

The Grade II listed Plumstead Power Station building opened in 1903 before being repurposed into a council depot in 1965.

Greenwich Council has previously claimed it has always wanted to bring the structure back into use, but the authority’s cabinet agreed to put the property up for sale at a meeting on October 16.

Other assets agreed to be sold included several council-owned car parks and former caretakers’ houses.

The decision to sell the sites comes after the council made £33.7m of savings this year in an effort to balance its budget, with a £27m blackhole projected for next year.

Labour Councillor Mariam Lolavar said at the meeting: “Ultimately, it’s not the position that we want to be in but it is the reality of the situation that we’re in.

"We’re seeing councils failing and filing for bankruptcy all over the UK and that is not the position that we want to be in.”

Michael Geissler, CEO of Mo-Sys, told the LDRS that the company would be sorry to leave the borough, having spent seven years there and winning the Best of Royal Greenwich Business of the Year Award in 2020.

He said Mo-Sys had been committed to the vision of helping to regenerate the Plumstead area, but the company appreciated the fiscal strains that many local authorities were currently facing.

He said: “At Mo-Sys we are constantly innovating, working collaboratively with industry partners, and this situation has presented us with a great opportunity to expand our vision for the new Mo-Sys headquarters.”

He added: “We have been exploring new synergistic partnerships to build a project greater than the one previously envisaged, that can be realised faster.

"Our new facility will be the virtual production hub for London and beyond, with all the resources for filmmaking, innovation and education, as we continue to grow from strength to strength, driving the virtual production industry forward.

"We are looking forward to announcing exciting new locations and collaborations in the coming months.”