FEARS are growing the £575million regeneration of Queensway may no longer be viable despite the firm behind the scheme insisting it remains "committed".

Opposition councillors say it’s extremely worrying Swan Housing has pulled out of its partnership with G15 landlord Catalyst to deliver 359 shared ownership homes on an industrial site in east London.

The housing firm is working with Southend Council on the overhaul of Queensway which will feature 1,700 new homes.

In December, the firm was slammed by the Government over its governance and financial viability.

Tony Cox, leader of the Southend Tories, said: “It does leave us with serious concern about the viability of the plans.

“I think we should be extremely worried about it.

"I think we need to see urgent talks to see if it can be viable and if they will be pulling out.

“I think the Queensway plans were questionable when the financial situation was announced.

"We now run the risk of preparation works being done for something that may never happen.

“I think the residents who are set to have these new homes will be frustrated about it too.”

The opposition leader said concern has been growing since news broke about the housing firm's financial troubles.

Under the plans for the Southend town centre regeneration, the demolition of the current dilapidated town centre blocks will take place over a phased period.

The scheme is expected to take in the region of 10 years to be completed.

Swan Housing, which manages 11,600 homes, was found non-compliant for governance and financial viability by the Government’s Regulator of Social Housing in December.

The regulator said there had been a “material deterioration in Swan’s financial position”.

On the same day as the non-compliant ruling, Swan revealed it had entered merger talks with fellow housing provider Orbit.

A spokesman for Swan Housing has sought to calm fears over the Queensway regeneration.

He said: “Swan Housing Association remains committed to bringing forward the Better Queensway regeneration project and is working closely with Southend Council, our regeneration partner, to ensure the scheme is not only viable but transformative for the local community and Southend.”

Southend Council was contacted for comment.