A further delay to the crucial Streatham Hub development has been met with anger by residents who fear continued delays are putting the entire project under threat.

Lambeth Council said work was expected to begin this month on the development - which includes some 250 new homes, a major supermarket, leisure centre, swimming pool and ice rink - but it has now emerged work will begin in October at the earliest.

Continued delays have sparked further speculation about a funding crisis and a stand-off between Tesco and the council over who will meet a shortfall in the budget to build the leisure facilities.

But a spokesman for Tesco said the “minor delay” was a result of allowing developers longer to tender their bids, that both parties were fully committed to the project and the promised delivery date of 2011.

But Streatham leisure centre user Julie Laytham, of Hopton Road, said she was sick of years of promises then delays related to the hub.

“We just want to see work start. I moved to the area on the back of promises of state-of-the-art facilities on my doorstep and for them to continually be put back is a real kick in the teeth,” she said.

Streatham Wells councillor Julian Heather said he was “shocked” when officers revealed the further delays to him last week.

“The council’s constant dithering is costing this scheme vital money and threatening its very future. Its over 12 months since the council leader sent every resident a Christmas card saying the deal was done,” he added.

A council spokesman said there had been no major hold ups to the project and the plans were proceeding well.

He said: "Inevitably with a project of this size timescales have to be flexible, and there has been a slight delay to allow important revisions to be made to the planning application, as well as to allow tenderers more time to prepare their bids and for Tesco to review the bids.

"This has not set the project back significantly and current estimates suggest that the new leisure centre could open late 2011.

“The Streatham Hub development will provide fantastic new leisure facilities for the community as well as a new supermarket and affordable housing. There will also be a new transport hub linking road and rail - all of which will help to revitalise the south of Streatham.”

A spokesman for the Labour group reiterated that the project was on track.

He said: "This is typical Lib Dem scaremongering, trying to talk down Lambeth. But the Lib Dem record in power was of complete failure and ability to deliver regeneration projects.”

In October the council and Tesco dismissed rumours of a stand-off over the budget for delivering the leisure facilities, that had risen from £20m to £32m.

The council said it had capped its contribution to the scheme at £20m, but Tesco refused to confirm it was willing to provide all of the missing £12m, saying negotiations were “ongoing”.

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