Rochdale Council has been forced to rip up its £250m agreement with Wilson Bowden for the redevelopment of Rochdale town centre as a result of an EU ruling.

The council will have to re-tender for a developer for the scheme following a European procurement test case decision on a Greek Council project.

Chief executive Roger Ellis said: ‘This has been a difficult decision for the council to make, but it has been taken with the best interests of the Town Centre’s regeneration and the people of Rochdale in mind.

‘A drawn out legal dispute would have led to significant delays to the town centre redevelopment as well as substantial costs to the public purse. This way we can re-run the process with the minimum delay and with the benefit of knowing the implications of recent case law.’

He said the decision would mean a month’s delay to the retail element of the development. Work can only start when the new interchange and civic centre are complete. These development of these elements are underway but will not be completed until 2011, he said.

Wilson Bowden’s plans for the town included 350,000 sq ft of new retail floor space, squares connecting into the Exchange Centre and Yorkshire Street, the creation of a central area with an iconic sculpture, an arts centre, a food store and car park.

Sultan Properties, owners of the Wheatsheaf Shopping Centre in partnership with Ask, originally objected about the process. DTZ advised the council.