Inner-city regeneration plans 'being put on ice'

Plans to breathe life into Britain's inner-city areas through regeneration projects are under threat because of the credit crunch, the Government will be warned today.

A Government-commissioned report has found that falling housing demand, the reluctance of banks to lend and cautious private investors have made future regeneration schemes too risky for the private sector to take on.

The study predicts that it will take years for major projects to attract the necessary funding unless the Government steps in.

Professor Michael Parkinson, who carried out the study, said: "Regeneration has had a very good 10 years, but the credit crunch has shaken the sector."