A discount store at the heart of a shopping centre bound for demolition has agreed a move to a new High Street location.

B&M’s store in the Castlegate centre is one of the remaining objectors to Stockton Council’s compulsory purchase of the 1970s shopping centre. The authority has £37m ambitions to knock the Castlegate and former Swallow Hotel down to make way for offices, and an ambitious riverside park.

But a CPO hearing on Wednesday morning heard how a deal had been reached on the discount store moving out to the former Marks and Spencer store on the High Street. Banking giant Barclays withdrew its objection to Stockton’s plan last month after reaching an agreement to move from its Castlegate home to units in nearby council-owned Wellington Square.

More visible demolition work at the Castlegate car park and the southern end of the High Street is set to begin next month. Desks on the objectors’ side were empty at the CPO hearing held in Thornaby’s Dunedin House.

Inspector Dr Roger Catchpole said he had letters of representations against a “stopping up order” – related to Riverside Road – from Virgin and Vodafone, with B&M and Northern Powergrid objecting to the Castlegate CPO.

But Barrister Mark Westmoreland-Smith, representing the council, told the hearing Virgin and Vodafone the substance of their objection was “being dealt with” – with diversions “agreed in principle”. He added: “B&M are going to relocate to the former Marks and Spencer store.

“That’s owned by a third party landlord but we’re going to step in and do the landlord’s work to facilitate that. We’ve got a relocation for Northern Powergrid equipment.”

The former High Street Marks and Spencer closed its doors in 2018 – with a complicated ownership situation emerging in the aftermath. Danish property firm, KS Habro, held a lease on the site set to last until 2254.

The empty store freehold was sold at an auction in 2020 for £550,000 – much higher than its guide price of £300,000. Mr Westmoreland-Smith said Habro Investment weren’t particularly keen to invest in the property so the council had agreed to step in so B&M stayed in Stockton.

He added: “A tripartite agreement has been set out in principle – where we will do the necessary landlord works.” The barrister said the objection was “historic for all practical purposes”.

Northern Powergrid had also objected to the CPO as they had five sub-stations in the Castlegate but the hearing was told negotiations with the council were well advanced. Mr Westmoreland-Smith said an agreement had been reached on the firm surrendering the substations in turn for a new site to be created on the High Street.

Dr Catchpole was also told Heron Foods was relocating to Wellington Square with work “in hand”.