The developers behind a giant retail and residential scheme proposed for Leeds city centre today played down speculation that it could fall victim to the credit crunch.

Recent reports in the national and property trade press have claimed that the Eastgate Quarters project has been delayed amid concerns about the faltering UK economy.

Today, however, joint developers Hammerson and Town Centre Securities insisted that the 25-acre mix of shops and 600 homes was still due to open as planned in 2012.

Asked if the flagship scheme had been put on hold, Hammerson spokesman Andrew Hilston said he did not anticipate work starting before summer next year.

Mr Hilston also acknowledged that the current economic climate was "challenging" – and revealed an unnamed third party was trying to overturn a Government-approved compulsory purchase order (CPO) relating to some of the land needed for the project.

But he went on: "We remain committed to the delivery of the Eastgate Quarters scheme .... and currently (it] is due to be delivered as planned in 2012, subject to a swift resolution of outstanding matters on the CPO."

The site earmarked for the development straddles Eastgate and is bounded by Vicar Lane, New York Street, St Peter's Street, George Street and Harewood Street.

Its 100-strong array of shops would include major branches of John Lewis and Marks & Spencer.

Today both companies said they remained committed to the project.

Coun Keith Wakefield, leader of Leeds City Council's opposition Labour group, welcomed the developers' assurances.

He also said, however: "Should the plans change at any stage, then I trust the public will be informed immediately. This project is of massive importance to our city."

Major developments in Leeds which have been hit by the UK's economic slump include the Wellington Street-based Lumiere skyscrapers and Sovereign Street's 'Kissing Towers'.