THE long-running Hatfield regeneration saga has been hit with yet another setback - but council bosses have vowed to fight on.

In what Welwyn Hatfield Council leader John Dean has dubbed a “bitter blow” to the revised, �45m project, hopes of bridging a funding gap were dashed this week, following the new Government’s �6.2bn worth of spending cuts.

The cuts include a �50m reduction in the Homes and Communities Agency’s (HCA) Kick Start programme – a funding scheme that Hatfield town centre had been on the reserve list for.

Following the spending cuts announcement, the HCA has put all future funding commitments on hold until after Chancellor George Osborne announces his emergency Budget on June 22.

Yet despite the setback, Welwyn Hatfield Council leader John Dean said the first stage of the project – redeveloping the Bill Salmon Centre site – would still go ahead.

“This is yet another bitter blow for the people of Hatfield and for all of us who are working so hard to make this redevelopment happen,” the Conservative councillor said.

“However, given the current state of the nation’s finances, I am not entirely surprised that our funding bid has been turned down.

“The good news is that we did make sure the new scheme was designed in a way which meant it could be progressed on a phased basis, to cover the eventuality that we did not receive any government or other external funding.

“In view of this latest disappointment, I am determined to ensure we make an immediate start on facilitating the commencement of phase one of the scheme, which entails the redevelopment of the Bill Salmon Centre site.”

St Modwen regional director Rupert Wood added: “This is a great disappointment but we remain committed to finding solutions that will allow us to bridge the existing funding gap and bring development forward, as economic conditions allow.

“The revised plans for the town centre have put Hatfield in the best possible position to see regeneration happen. We continue to review funding routes with our partners Welwyn Hatfield Council and the HCA and will be looking to identify solutions with all parties including the Government to drive this much-needed regeneration forward.”

A council spokeswoman said work on the Bill Salmon Centre would commence after a review of the scheme had been undertaken.