Gentoo Ventures, which is behind the £14million redevelopment of the former AMC Ford site on Lagny Street and Clayport Street, is currently appraising the development and work may have to stop to prevent financial risk.

Work on the site to build 93 one and two-bedroom apartments, including 17 affordable homes and four retail units, began in November last year with completion due early in 2009, but the downturn in the economy has led to uncertainty over its future.

Gordon Castle, chairman of Alnwick Community Development Trust said: "The last thing we want is a long-standing eyesore in the town.

"We are looking forward to seeing this derelict corner of Alnwick being restored to a condition befitting the town and it is very disappointing to think we might be in for a lengthy delay.

"I feel very sorry for the residents of Dispensary Street in particular who are going to have to look out on this wasteland for some time."

Coun Ken Gray, ward member for Alnwick Clayport, said: "It is understandable because of the downturn in the property market at the moment, but personally I would love to see the site completed as soon as possible. It will certainly enhance that end of town."

But residents on Dispensary Street, who have suffered subsidence problems because of the work, would be happy for it to stop.

Tim Kent said: "It is very pleasant having that view over the whole town at the minute, and it will give the site a chance to settle down."

Stewart Allen, managing director of Gentoo Ventures, said: "In light of the current market conditions and the detrimental impact the credit
crunch is having on all businesses, Gentoo is currently undertaking an exercise to critically reappraise the Alnwick development to minimise risk.

"Gentoo are committed to working in this area, however we do recognise that we are operating in a very turbulent economic climate. The plan for this development is for all apartments, and private purchasers and investors are at present unable to secure mortgage finance on properties of this type.

"We need to ensure we operate commercially at all times."
Peter Biggers, head of planning and building control at Alnwick District Council, said: " We will be very disappointed if there is a prolonged delay to construction on these sites.
"These are key locations in the town centre and we were looking forward to high quality developments on what were previously derelict sites. We hope the set-back is temporary."
The Stonewell Lane steps which were closed because of the redevelopment have now reopened.
Gentoo Ventures must have the redevelopment complete by 2012 as stated when planning permission was granted.