Contractor Wates has quit the £100m Barking town centre project after housebuilder Redrow took control of it from developer Urban Catalyst.
In a move predicted by Building, Redrow Regeneration this week bought Urban Catalyst (Barking), which holds the rights to develop the mixed-use scheme, for what was described as a "nominal consideration".
Redrow is looking for another contractor for the project, the first phase of which is due to be complete by mid-2007. This includes 200 residential units and a Lifelong Learning Centre designed by Allford Hall Monaghan Morris.
Paul Drechsler, Wates' chief executive, confirmed that the firm was undertaking transition works until its replacement was appointed.
He said: "We will not be doing any further work. Redrow is clearly more of an established residential developer, and that is obviously not an area that Wates is focused on."
Work on the project stopped in September after contractual wrangling between Wates and Urban Catalyst, although Wates played down reports that there had been a dispute between the two.
Ken Dytor, Urban Catalyst's chief executive, will continue to be involved in the project in an "advisory role" although Urban Catalyst will no longer run the project. Dytor said he was delighted that Redrow had taken the job on.
Paul Pedley, Redrow Regeneration's chairman, said: "I know Ken extremely well and he will advise us on the project, but essentially we've taken it over from them."
Phase two of the scheme, which is expected to include further residential development, still requires planning permission.
Pedley said: "We're aiming to have everything in place so that when phase one finishes, phase two will begin straight away."
He said the project team would be confirmed "in the very near future".