Investors trying to salvage a £25 million pound plan to rejuvenate Newhaven have accused the county council of dragging its feet.

The two main firms behind the Eastside Business Park and road project which could bring 1,500 jobs to Newhaven have warned East Sussex County Council it could end up with a seven-figure compensation claim if it pulls out now.

The council issued an eight-week deadline last month to firms involved in the scheme to come up with funds to help cover the costs of buying a 'ransom strip' needed for access to the site from owners Parker Pens.

Developer Bannertown Group and major landowner the Baker Trust have each agreed to chip in £250,000 towards the £750,000.

But Tony Beadle, managing director of developer the Bannertown Group, said: "I've been trying to sort out meetings but it's like banging your head against a brick wall. We're desperately trying to get everyone together but it's like we're chasing our own tails."

The firms have been given until October 29 to thrash out the details or the council has threatened to walk away.

Officers have been working on the project for the past two years to compulsorily purchase the land at a cost of around £2 million of tax-payers' money.

John Husband, who represents the Baker Trust, said: "The council has gone so far it is too late to pull out. If they withdraw now the compensation bill will run to millions of pounds and the whole scheme will go out the window.

"Instead of saving money they will lose a small fortune and end up without this scheme which Newhaven so desperately needs."

Deputy leader Daphne Bagshawe said the companies involved must share the cost burden.

She said: "We're definitely not stalling. We've made it crystal clear that the private sector must agree to cover the difference in cost between our staying in and pulling out by October 29.

"We're not doing this to be difficult, we want the project to go ahead and have already ploughed a large amount of money into it. But these are the companies who will profit from the scheme and if they wish it to go forward they have got to start picking up the tab.

"Negotiations are going on and I want to play a fruitful and productive part in those."