St Modwen has pulled out of partnering Dudley Council to redevelop a £100m scheme on the site of Dudley Zoo and castle.

The council, St Modwen and the zoo have been working on plans for a leisure and heritage scheme on the 148-acre site at Castle Hill for seven years.

Councillor David Caunt, leader of Dudley Council, said: ‘In recent times the unforeseen downturn in the global economy has significantly impacted the progress of the development.

‘The development agreement expired in January and after careful consideration it was agreed, by all parties involved, that this presented a natural opportunity to review the current situation and the development requirements for the site.

'The development agreement between St Modwen and the council will therefore not be renewed.

‘The council is now having detailed discussions with Advantage West Midlands regarding the future of Castle Hill.’

John Dodds, regional director for St Modwen, said: ‘This decision was reached mutually and amicably. Naturally after years of preparation and negotiation, this is disappointing for all parties involved and we wish the council and AWM every success in developing this important site.’