Agreement may be close on a planning row which is blocking a big housing development.

A public inquiry began today into the future of the Ropetackle site, on the banks of the River Adur at Shoreham.

The land has been derelict for more than 30 years.

The South East England Development Agency (Seeda) wants to build more than 200 homes and leisure facilities on the site as part of the regeneration of Shoreham Harbour.

It has spent more than £2 million buying up most of the land but was forced to issue compulsory purchase orders (CPOs) after three remaining landowners refused to agree a price.

It is the first time a regional development agency has used its powers to issue CPOs and the inquiry is being seen as a landmark case.

The inquiry was opened by Government inspector David Lavender at Adur Civic Centre in Shoreham this morning.

It was immediately adjourned so further talks could be held between Seeda representatives and the landowners, Jim Payne and Kevin French.

John Hobson, representing Seeda, later revealed both sides were close to reaching an agreement over the sale.

The inquiry was expected to proceed even if agreement is reached so the CPOs can be confirmed by Environment Secretary Margaret Beckett.

It is scheduled to continue tomorrow with a site visit by Mr Lavender.

Ian Lowrie, chief executive of Adur Council said: "This is being seen as a test case by other development agencies.

"It is likely to go ahead even if agreement is reached as it will set a precedent for future CPO inquiries involving regional development agencies."