Preston City Council (PCC) has announced that plans for a £700m regeneration scheme will go ahead as planned, despite the withdrawal of one of the property companies behind the project.

Grosvenor has decided to pull out of the joint venture with Lend Lease in order to focus on a larger portfolio of smaller developments, instead of "concentrating on a few large, long-term, city centre regeneration schemes". However, Lend Lease has confirmed that it will continue to work with PCC on the scheme, which was called in by the government earlier this year due to the scale and nature of the proposals.

The retail-led development is set to feature a nine-screen cinema, cafés, bars and a new bus station, as well as an enhanced public realm incorporating public art, a residential development and a car park. In a statement, PCC's group leaders - Ken Hudson (Conservative), John Collins (Labour) and Danny Gallagher (Liberal Democrats) said: "Although we are naturally disappointed with Grosvenor's decision we understand their reasons."

Richard Coppell of Lend Lease added: "We wish to continue working with Preston City Council and believe in the potential of both Preston and the Tithebarn scheme. Our next step will be to respond to the recent government call in."