Hopes that a deal to sell Newhaven port would mean the end for plans to site a waste incinerator there have been dashed.

North Quay, which is earmarked for an incinerator in preliminary waste plans for East Sussex and Brighton and Hove, was part of the £15 million deal agreed with a French consortium for the port.

Previous port owner Sea Containers said it has retained ownership of North Quay to invest in light industry.

But there are fears the company might be prepared to sell the land for incineration for the right price.

However, Sea Containers insists it is against incineration on the site because it could damage its £11 million regeneration of the West Quay, which includes new houses, public open space and a new fishing complex.

The Newhaven Economic Partnership (NEP) controversially said it would not give a £380,000 grant to help the French buy the port unless they signed a covenant agreeing they would not allow an incinerator at North Quay.

Now Sea Containers has decided to hang on to North Quay, Lewes MP Norman Baker said: "If Sea Containers is against an incinerator then let it sign an accord, either with councils or with the NEP, to prove it."

Sarah Ireland, NEP programme manager, welcoming the sale of much of the port to the French and the developments it would bring, said if Sea Containers planned to sell North Quay "then we will be looking for assurances."

The draft waste plans will go to a public inquiry later this year.

If the incinerator plans for Newhaven get the go-ahead, the councils could opt to compulsorily purchase North Quay if Sea Containers refuses to sell.

The proposed site for the incinerator is just a few hundred yards away from where Sea Containers is building 64 town houses.

A Sea Containers spokesman said: "We have urged East Sussex County Council not to jeopardise the successful redevelopment of the West Quay by going ahead with an incinerator in Newhaven.

"We are spending a lot of time and money on the redevelopment of West Quay and we are not going to jeopardise that.

"We are not going to sell the land. We retained the land to increase activity in the bulk materials sphere."