The blow comes despite last week's assurances from developers that it would be going ahead according to schedule.

Yesterday, however, London-based Hammerson announced that the main construction phase of the project was now unlikely to start as planned in 2009. Hammerson chairman John Nelson said the firm was putting the brakes on major new developments because of the "unprecedented conditions in financial markets worldwide".

The company did stress, though, that it remained committed to the Eastgate scheme, which would create up to 5,000 jobs.

It also said it would be continuing with the preparatory work that was already under way on site.

Today Coun Keith Wakefield, leader of the city council's opposition Labour group, called news of the likely delay "very disappointing".

He also called on the developers to explain why they had not come clean about the potential hold-up when approached by the YEP last week.

"The people of Leeds deserve to be kept fully in the picture at all times – especially about a major project such as this one," said Coun Wakefield.

The site earmarked for the scheme 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 is due to include branches of John Lewis and Marks & Spencer. High-profile developments in Leeds which have been hit by the UK's economic slump in recent times include the Wellington Street-based Lumiere skyscrapers and Sovereign Street's 'Kissing Towers'.