EXCLUSIVE: The hotel company which was to be part of a four-star hotel and 15-storey block of flats on Kingston's riverside has stepped back from the deal.

The 150-bedroom hotel was a key part of a 359-flat development in Skerne Road given the go ahead by Kingston Council last year subject to conditions.

The Surrey Comet has learnt that Moran Hotels has walked away from a deal with developers NHP because of delays caused by the public inquiry into the scheme allied with the recession. The two groups are still talking, but NHP confirmed it is now talking to other hotel operators.

Managing director of NHP Philip Trim said the hotel firm was still in discussions but had stepped back from signing on the dotted line.

He said: "We are trying our darndest with Moran and we are working our butts off to make it happen but there are no guarantees."

He confirmed bringing a hotel to Kingston was still a priority for the developer, despite an application to Kingston Council to be heard on Wednesday asking for obligations to build it before 50 per cent of homes were occupied.

Bulldozers will begin demolition in March regardless of the council's decision on Wednesday. But Mr Trim said if the council rejected its plea it would have to revert to the less popular application which was approved only after an appeal to Hazel Blears, Secretary of State for Communities and Local Government.

No-one from Moran Hotels was available to comment.