COLCHESTER Council is obliged to ask Essex County Council to lift the covenant it holds over the Cultural Quarter site.

The confirmation came at a meeting of the council’s governance and audit committee in response to queries raised by Conservative Group deputy leader Lewis Barber and Colchester High Steward Sir Bob Russell.

Mr Barber said councillors should be warned of any potential legal problems if the contract between Colchester Council and Alumno could not be fulfilled.

The council signed a 250 year lease agreement with Alumno meaning it would receive a one-off payment of £980,881 if planning approval was agreed.

Alumno's plans to build 336 student flats, an 87-bed Travelodge and retails units were approved by a planning inspector on appeal despite a tidal wave of opposition.

But County Hall put the brakes on the development by announcing it would review the covenant it holds over the Queen Street site.

The governance and audit committee was told Colchester Council was obliged to use its “best endeavours” to ensure the covenant was lifted as set out in a contract signed with the developer.

Colchester Council chief executive Adrian Pritchard said it was standard practice in commercial development deals to enter legal agreements with conditions on things like planning permission.

He said: “It is exactly the same with the covenant which means the land has a covenant on it. We will use our best endeavours to have conversations with Essex County Council about the lifting of the covenant. That is what it says: ‘We will use our best endeavours’.

“There is no financial penalty which says if you do not lift the covenant you will pay the developer £1million.

“Having said that, there is a legal agreement in place, it does have a set of conditions and should any of those conditions not be fulfilled, a developer could quite easily say they’re going to take legal action against you.

“I cannot sit here and tell you they won’t, but what I would say there are a set of conditions, it wasn’t just the covenant and it wasn’t just the planning application.

“I think there were a number of outstanding issues which have not yet been dealt with, therefore, the planning permission cannot be implemented as it stands.”