TAXPAYERS’ cash could be used to save the £575million Queensway project, opposition councillors fear after the housing firm involved were slammed by government inspectors.

Concerns surrounding the 1,760 homes project are growing after inspectors found Swan Housing had a “material deterioration in their financial position”.

Ron Woodley, Southend Council deputy leader, has insisted taxpayer funds will not be used, but opposition councillors remain concerned.

The council recently entered into a deal with the developers behind the Seaway leisure development to hand over £10million to get the project off the ground, after concerns were raised over its financial viability.

Tony Cox, leader of the Southend Conservatives said: “I would not be surprised if the council has to support this scheme and the tax payers will have to bail it out. There will be concern about whether it will go ahead after the report.

“There should be concern about the checks that are done on partners for the council on these project. We need assurances the company is stable and in a financial state to carry on with these plans.

“The merger causes merger only shrouds it all in more uncertainty, I think. It doesn’t always mean plans will go ahead when it happens as the firms will re-look at the proposals.”

It comes as Swan Housing Association bosses enter discussions with Orbit Group Limited to merge the two companies in a bid to improve the social housing firm.

The huge Queensway plans will see 1,760 new homes built.

Ron Woodley, Independent deputy leader of Southend Council insisted the company’s issues will not impact the Queensway project.

He said: “The Tories were all for the Queensway project and we will not be propping it up. The company is considering merging with the Orbit which will help. I am not concerned about the project. We have to see the situation with the merger and I’ve not had any correspondence about this being any of any detriment to the project.”

Inspectors pointed towards a lack of business planning and ability to manage risks at Swan.