A £100m leisure and heritage redevelopment scheme at Castle Hill in Dudley, UK has been cast into doubt.

Proposals for the 148 acre (59.89 hectare) site were first outlined in 2003 by developer St Modwen, and would have involved the doubling in size of Dudley Zoo as well as a new hotel and retail units.

But in the light of the current economic slowdown, John Dodds, regional director for St Modwen, said that revised growth predictions for the zoo have now cast doubt on funding arrangements for the project.

"Unfortunately, due to the current economic climate, the zoo has recently advised that its initial visitor and price growth predictions, upon which the funding of this scheme has always rested, are now unachievable," he said.

"We were at an advanced stage of concluding the legal agreements with the zoo and the funding agreement with Advantage West Midlands (AWM), as well as advancing negotiations with a Garden Centre. The zoo’s news now puts the viability of the scheme into question."

A spokesperson for Dudley Zoo, however, denied claims that the redevelopment of the attraction was under threat, saying that the project would go ahead even if St Modwen pulled out albeit on a different timescale.

St Modwen had been selected by Dudley Council as the development partner for the scheme in 2001, and Dodds remains hopeful that a conclusion can be reached to enable the project to go ahead.

"However, we are now working hard, together with AWM, the council and Dudley Zoo, to find a way to resolve this funding shortfall," said Dodds.