The Northwest Regional Development Agency (NWDA) is providing a £1m lifeline to Penrith’s New Squares shopping and housing scheme.

The £77m scheme was put on hold in October when National Australia Bank withdrew its offer of funding to scheme developers Lowther Manelli.

The NWDA money will enable the first phase of the project, the construction of a new stadium and community facility for Penrith AFC, to be completed.

Led by Eden District Council, this will allow the club to relocate from its current ground and paves the way for a proposed £77m retail-led development for the town.

Steven Broomhead, NWDA chief executive, said: 'The Agency has moved swiftly and decisively in providing a range of measures to help the region’s businesses through these challenging economic times.

'However, just as important is ensuring that key regeneration schemes, such as New Squares, are not adversely affected by the economic downturn.'