Lowther Manelli's New Squares scheme grinds to a halt after National Australia Bank pulls out

Work on a multimillion-pound development in Penrith has ground to a halt, following a withdrawal of funds by National Australia Bank.

The Penrith New Squares development was to be the biggest in the Cumbrian town's history, with four new town squares, a 5,100m2 Sainsbury's supermarket and a new football ground for Penrith FC on the edge of town.

According to developer Lowther Manelli, the project has now been halted after the Australia bank withdrew funding for the £79m scheme.

However, councillors at Eden District Council have said they have a contingency plan for how the project can move forward.

Lowther Manelli said in a statement that it remained committed, along with Sainsbury's, to delivering Penrith New Squares, and that it aimed to restart the project in the New Year when alternative funding sources are in place.

Contractors Bowmer & Kirkland and Thomas Armstrong were unavailable for comment.