A DEAL which will see a former prison become a crucial part of a retail war has now been confirmed.

Hambleton District Council has rubber-stamped a local cabinet decision to buy Northallerton prison, which closed in 2013.

The aim is to complete its redevelopment within five years to help counter the threat to the town’s economy from the planned £50m designer retail park at Scotch Corner.

The masterplan for the prison area includes a retail area, workspace, new homes, leisure and a town square. It incorporates the prison’s 3.4 acres and its five listed buildings.

“This sale is just the start of a transformational project for this district – and one which this council is extremely excited to be leading,” said council leader Mark Robson.

“Our masterplan will complement existing businesses, enhance them and increase their footfall.

“It will bring new opportunities for jobs – in the construction industry to develop the site and then in the new business bases created.

"And it will add to the council’s key aim – to boot economic growth for Hambleton.”

The agreed purchase price is confidential because of continuing negotiations with the Ministry of Justice but is understood to be substantially less than the original £2.7m price tag.

It will be funded from the council’s £10m Economic Development Fund and any money made from the redevelopment scheme will be returned to the fund.