A massive redevelopment of Kingston town centre has been thrown into doubt after a report that Hammerson has pulled out of a deal to buy the Eden Walk Shopping Centre.

An article in the Estates Gazette on September 27 claimed that instability in commercial property markets caused developer Hammerson to walk away from the £90million deal, after its board refused to approve the acquisition.

Hammerson had put in an offer to buy the shopping centre as part of a plan for a redevelopment of a 15-acre site around it, to be known as the Eden Quarter.

It is a key phase in the long-term K+20 scheme to attract more visitors to the town centre over the next 20 years, by improving transport links, shopping areas and the riverside, as well as enhancing the town's cultural and historical value.

Hammerson has denied it has pulled out of the deal, saying the article in the Estates Gazette was sensationalised.

But Roy Thompson, head of planning and development at Kingston Council, said Hammerson had suspended negotiations while it reassesses the financial viability of the acquisition.

Hammerson spokesman Kevin Crowley said: "The firm has not walked away from the Eden Walk deal. Though we have not bought it yet, we are still in discussion."

There is speculation that Hammerson's tactics are designed to reduce the owner's asking price for the shopping centre. Mr Thompson rejected suggestions that the move would jeopardise the long-awaited Eden Quarter.

He said: "It's been reported that Hammerson has pulled out of the deal. But my information is that they've put it on hold while they assess the volatility of the market."

What is planned for the Eden Quarter?

In 2005, Kingston Council signed an agreement with Hammerson to develop the Eden Quarter by 2016, extending the shopping district east of Eden Street over Ashdown Road.

Eden Walk car park will be demolished, along with the premises currently occupied by Habitat, Sainsbury's, Allied Carpets and Heals. It will be replaced by a new pedestrian thoroughfare linking Clarence Street to Eden Street. This new thoroughfare will start at 40-44 Clarence Street, emerge at the eastern end of Eden Walk, and cross Eden Street to end in a new public open space.

The deal will also convert Eden Walk Shopping Centre into shops and offices.