THE long awaited redevelopment of Watchet's run-down East Quay is likely to be heading back to the drawing board after a disagreement over the value of the prime marina-side site.

West Somerset Council, which owns the land, looks set to sever its ties with Manchester-based Urban Splash - the developer that signed an agreement to create a complex of homes, retail outlets and community space on the land almost a decade ago.

The company's attempts to bring the development to fruition have weathered economic downturns, local objections and conflict with the boating fraternity over the use of the quayside area.

But now it appears the deal signed between Urban Splash and the council in 2005 has reached the end of the road.

The key stumbling block is the amount of cash the company is prepared to pay for the site on which it hoped to build a scaled down version of its original plans, with just 30 homes, rather than 83.

At a meeting on Wednesday, councillors will be recommended to reject Urban Splash's offer of £180,722 for a long term lease of the site - believed to be considerably less than the district valuer's estimation of its worth.

They will also be urged to instruct solicitors to draft and serve a notice to terminate the long standing agreement with the company from April 1.

In a report to councillors, interim executive director Adrian Dyer, who has been involved in the negotiations from the outset, said a valuation report had been sought to ensure the council had an idea of the 'best value' of its assets on the site.

The findings are not being made public on the grounds of commercial sensitivity.

But Mr Dyer said it had not been possible to reach agreement with Urban Splash concerning the price to be paid.

He said the only offer from the company was based on the original tender accepted of £500,000, coupled with the planning permission which was granted for 83 homes.

Urban Splash had worked out the figure it was now prepared to pay for the amended scheme of just 30 homes on a percentage basis.

The collapse of the deal means the council will have to repay the company a £50,000 deposit handed over in 2006, plus interest of £22,300.

Mr Dyer said Urban Splash also believed it was entitled to some compensation in return for what it saw as a significant investment in the site.

This is currently being considered by solicitors and is expected to be considered by councillors at a future meeting in March.

However, although the redevelopment of the major part of the site appears to have hit a brick wall, protracted negotiations with Watchet Marine Ltd, which operates the marina, on land it wants to use could be on the verge of reaching a successful conclusion.

Councillors are being recommended to sign a deal with the company that clarify its rights, with concessions on both sides.

Watchet Marine Ltd would pay a one-off £20,000, plus an annual peppercorn rent of £1 for leasing the boatyard area on the East Quay and being allowed to demolish the old cargo shed on the site and replacing it with commercial money-making units.

Under an existing lease, the marina operator has the guaranteed use of at least 35 and possibly up to 53 parking spaces in Watchet, as well as the right to house 18 boats of no specified size in the East Quay, along with equipment to lift boats in and out of the water.

The new deal, agreed in principle by councillors last November, would see the reduction of car parking spaces to 38 - 20 in Harbour Road and a further 15 permits for other car parks in the town, along with three spaces outside the marina shower block.

Although the district valuer has estimated the market value of the East Quay area that would be leased to the marina operator is £29,000, the £20,000 figure is understood to take account of the unknown costs of demolishing the cargo shed.

However, the value of the former harbour master's office and Quay West Radio buildings on the East Quay is being kept under wraps, again on grounds of commercial sensitivity.

Both the marina operator and Watchet Town Council have expressed an interest in the buildings and options for their future use are also likely to be discussed by councillors in March.