Southwark council has delayed choosing the preferred developer for its £1.5bn Elephant & Castle regeneration scheme.

Two consortiums, one led by Lend Lease and the other by St Modwen, were due to find out which had been chosen to develop the scheme last Tuesday.

But those running the project, which is one of the largest regeneration projects in Europe, said a decision would not be made for another four to six weeks.

A council source said: “We need to retain competitive tension and this is the best way to do that.”

The source denied that the delay was because the two bidders were in talks to team up on the scheme. This has been suggested because St Modwen owns the shopping centre at the heart of the scheme and will play a large role in the development, regardless of the decision.