The future of the controversial King Alfred redevelopment was thrown into doubt last night.

Josh Arghiros, managing director of developer Karis, said the financial viability of the scheme was looking "very shaky" because of falling house prices.

A review of the scheme is being undertaken by Karis and the Dutch bank ING, the scheme's financial backer, and is expected to conclude in the next three weeks.

The possible collapse of the project follows the redevelopment of Brighton Marina being put on hold because of the worsening economy. Last night Mr Arghiros revealed ING had yet to decide whether it would press ahead with the scheme.

He said: "The financial viability, as with every major project in the country, is looking very shaky.

"Karis is committed to moving forward with this project. ING needs to make its decision about what it is going to do, and the decision is to be made jointly. As far as Karis is concerned the project will happen, whether it is the project as it is or not. I believe there is no reason why the sports centre cannot remain as part of the scheme - it is integral to it."

advertisementThe £290 million Hove seafront development is the latest in a series of major projects in Brighton and Hove to be hit by the economic downturn. Profit margins are being squeezed by falling house prices, while uncertainty about the future course of markets has made financiers more wary of embarking on major building programmes.

The King Alfred scheme, which was given planning permission last March last year, comprises 751 homes in 11 buildings, including two towers up to 98 metres high.

A £49 million sports centre, small shops, a police office, a GP surgery, cafes, restaurants and public spaces are planned. Tony Mernagh, executive director of Brighton and Hove Economic Forum, said: "Every single major project in the country is under review and it is quite responsible for a developer to review its scheme in the current economic conditions.

"We do need to get a major development through to keep that momentum going if we don't want to be a city that dreams a lot but doesn't get anything through."

The £235 million redevelopment of Brighton Marina came under review earlier this year because of troubles in the housing market.

Brunswick Development's project at the marina includes 853 flats, some within a 40-storey tower, as well as leisure and shopping space. The i360 tower has been delayed because of market jitters, and plans to build an Olympic ice rink and concert venue at Black Rock, Brighton, have been set back because of difficulties in finding a financial backer. These schemes are making progress again.

Building work on the controversial King Alfred project had been predicted to start next February. It is not yet known what effect the review will have on the construction programme.

The news comes as the King Alfred's world renowned architect, Frank Gehry, said gaining planning permission for the £290 million development was a "painful process" and the difficulties had put other developers off using his services in Britain.

Asked about the Hove seafront development, Mr Gehry said: "Don't go there - it was a painful experience.

"I guess I never did understand your planning system and all those interfering government design advisers."