And the council plans to seek costs from Centros for the extra expense it has incurred in defending the £150 million retail-led scheme along Lancaster's canal corridor.

Council officers had been left alone in defending the decision by the authority's planning committee to approve the plans last October.

Since then, English Heritage has come out in opposition to the demolition of some heritage buildings, prompting the secretary of state's 'call in' of the decision.

Giving evidence yesterday, conservation officer Stephen Gardner said he believed detailed designs for the bridge between St Nicholas Arcades and Stonewell should have been included in the outline plans.

He also raised concern over the proximity of some of the buidlings proposed to listed buildings, including that of an entrance block off Stonewell to the former Tramway pub.

The inquiry heard Centros had been alerted to the issue later that afternoon and two seats were reserved for the developer at the hearing this morning, with a placard bearing its name.

But no representative attended.

In a position statement, the council's head of planning, Andrew Dobson, said:

"As the evidence has been considered as part of the inquiry process it has become increasingly apparent that there are a series of issues which are prolematic, and which in the absence of the applicant the local planning authority is unable to address."

Council barrister, Paul Tucker, said: "My client considers itself badly let down by the stance taken by Centros."

He added: "This has caused unnecessary expenditure to the council tax payers of Lancaster," he added.

The council had set aside £50,000 to cover its costs at the inquiry.

Inspector, John Gray, said the inquiry would proceed without the council and that he would still make a recommendation to the secretary of state.

He said he was happy with the written evidence provided by English Heritage, SAVE and It's Our City, which have opposed the scheme and did not need to hear from witnesses.

But Eian Caws for English Heritage and Andrew Deaking for SAVE said they wanted to present oral evidence and Billy Pye, representing It's Our City, said he would like to consult on the issue.

Mr Gray agreed to listen to the English Heritage evidence this afternoon and said a decision on whether the SAVE and It's Our City witnesses should take to the stand could be made next week.

If they do, the inquiry could be extended to a fourth week, probably in August.

William Palin, Secretary of SAVE said: 'We are delighted that the council has acknowledged that there is no point in continuing its defence of this application.

"SAVE has argued from the outset that this is completely the wrong scheme for this sensitive and finely textured site."


Council leader, Coun Stuart Langhorn, stressed that the council remained committed to the development of the canal corridor.

"The site itself is rundown and decaying with many derelict buildings," he said. "Without its regeneration we run the risk of falling behind other towns and cities in the north west.

"However, the public inquiry has raised a number of questions which need to be answered.

"It has always been the city council's position that it would present evidence to the inquiry in relation to its own decision to grant the development planning permission - not to defend the applicant."