A joint venture between British Land and Lend Lease has pulled out of the bidding process for the £1.2bn regeneration of Basildon town centre in Essex due to the economic downturn.

Only one bidder – a Barratt Homes/Wilson Bowden consortium – now remains, and discussions will continue with Basildon Council and the Basildon Renaissance Partnership to ensure the project moves forward. Plans for the redevelopment of Basildon include 49,000sq m (527,432sq ft) of additional retail and leisure floor space, as well as the relocation of the town's civic centre, library and community theatre.

A residential development is also set to be included in the proposals, while the 101-hectare (250-acre) Gloucester Park is to be brought into the heart of the town, providing new recreational opportunities including the town's new Sporting Village. The Sporting Village, which is expected to open in 2010, includes a 50m swimming pool, a learner pool, a gymnastics centre and a fitness suite. It has also already been approved as a potential pre-Games training camp for the 2012 Olympics.

A spokesperson for the council revealed that once a development partner is signed up, further master planning of the town centre will be carried out, including public consultation over the project's make-up. Ian Butt, Basildon Council's development project director, said: "It is unfortunate that the joint venture is unable to continue in the procurement process. These are very testing times for the industry and regeneration projects."

A spokesperson for the joint-venture partnership said: "Unfortunately, the economic situation and our commitments elsewhere in the UK have led us to take the decision to withdraw from the process." However, public money continues to be invested in Basildon town centre, with a new lighting scheme to be unveiled in the spring, while improvements are being made to the train station area, with the Homes and Communities Agency contributing £2m towards the scheme.