The £500m regeneration of a large area of Croydon town centre is set to go ahead after years of political wrangling but has been scaled back in the face of recession.

Schroders, the fund manager, and Stanhope, the developer, will say today that the tussle with the borough council over the 1m sq ft Croydon Gateway development has been put to one side with the launch of a partnership to regenerate the area as part of plans to transform the centre.

There are nine acres of offices, housing, restaurants and cafés planned at the site, next to East Croydon station, although the original plans have had to be scaled back to what is 'realistically achievable'.

William Hill, head of property at Schroders, said: 'We need to be much more pragmatic about what can be delivered in the current market. The whole world needs to readjust to the new economic environment.'

Financial Times