Centros will not represent itself at a public inquiry into its £140m regeneration scheme in Lancaster city centre out of protest against the government’s decision to call it in.

The shopping centre developer said it will not play a part in the inquiry over its North Canal Corridor scheme as the development has ‘stood up to extensive public scrutiny’ and was given planning consent by a margin of 15 votes to four.

English Heritage, Save Britain’s Heritage and local group ‘It’s Our City’ have opposed the proposals on the grounds that it would involve the demolition of 30 buildings, 18 of which are in conservation areas.

Lancaster City Council is in favour of the 10-acre brownfield regeneration which would provide 350,000 sq ft of shops and 150 homes.

Richard Wise, Centros chief executive, said: ‘Having been lobbied by English Heritage and local minority objector group ‘It's Our City’, the Government has effectively valued a handful of mediocre unlisted buildings above the delivery of a major regeneration scheme and a thousand new jobs.

This is a complete contradiction of its policies and all the economic initiatives aimed at pulling the country out of recession.

‘Further expenditure on our Lancaster planning application at this time would affect the scheme delivery and jeopardise some of the community benefits, and therefore there is no point in us spending up to another million pounds to be represented at the inquiry.’

William Palin, Save Britain’s Heritage’s secretary, said: ‘In the current financial climate there is little appetite for large, brash, retail schemes and Centros’s reluctance to push the scheme forward has confirmed this.’