ONE of the most controversial developments in Watchet - a £12 million scheme to transform the town's derelict East Quay - is on the verge of collapse.

Urban Splash's vision of creating a complex of 86 apartments, coupled with a mix of retail outlets and community space, was granted planning approval almost 18 months ago.

But now it appears to have fallen victim to the economic downturn and is unlikely to go ahead in its current form.

West Somerset Council, which owns the land and struck a deal with the developers some years ago, admitted that the scheme was under threat.

Watchet Town Council was told this week that the district council's executive director Adrian Dyer told a meeting of the Williton, Watchet and Quantocks Area Panel in February that the development previously agreed would not go ahead.

Mr Dyer was due to attend a meeting at Urban Splash's Bristol headquarters with Watchet Marina operator Tim Taylor yesterday (Thursday) at which it was expected the details of a smaller scheme would be discussed.

Cllr Sally de Renzy-Martin told Monday's town council meeting that Mr Dyer had said there would be a "modified" development.

Cllr Tony Knight, who represents Watchet on the district council, said a written update on the situation would be given to the authority's cabinet in April.

"Adrian said at the area panel meeting that the present scheme would not go ahead but there could be something coming out of this meeting (in Bristol) this week, so don't give up hope," said Cllr Knight.

District council spokesman Stacey Beaumont told the Free Press that the viability of the current scheme was being looked at in light of the economic downturn.

She said yesterday's meeting was the final one in a series which had been held to assess its future and also to investigate the possibility of potential alternative schemes.

The Urban Splash proposal was hailed as an iconic landmark by its supporters but labelled a 1970s hotch potch by critics.

It underwent two revisions in a bid to allay a raft of concerns from local people, including boatowners and Mr Taylor, who was worried that the development would make it impossible for the marina to operate.

The final version also attracted objections from highways chiefs, worried about the impact it would have on Watchet's car parking capacity.

Objectors even called on the Government to intervene after planning permission was granted in October 2008.

But the Government Office for the South West refused to 'call in' the application, which was given the go ahead by district planners with more than 30 conditions.

Local author, journalist and boatowner Tony James, who was among the objectors, welcomed the news that the approved scheme was unlikely to be built.

"It was grotesquely oversized and the boat parking was ridiculously inadequate," said Mr James.

"Most people thought it was too big and totally out of keeping with the surrounding area.

"It would have looked like a 1960s car park in Lewisham and would have been a complete disaster."

Mr James said what was needed was a development that took account of the nautical theme but also respected the historic setting and Watchet's existing character.

"I just thank God that someone has had second thoughts about this and that everyone involved has finally come to their senses."