A £2m development in the centre of Chester-le-Street has been put on hold.

Private care provider John Oates had hoped to start work on a 60-bedroom residential care home near the centre of the town this year.

After town planners at Chester-le-Street District Council granted permission for the plans, developers moved in last month to demolish the ramshackle former Durham County Council depot on the site.

But with work due to start at the site, in Hopgarth Gardens, Mr Oates has decided to mothball the project indefinitely until his confidence in the future of the care industry is restored.

Mr Oates, who also owns Durham House Residential Home, in Mains Park Road, Chester-le-Street, said he was not prepared to invest £2m in the project at the moment.

He said: "I have to put the development on hold until I can see a clearer picture in the care industry.

"At the moment central Government seems to be encouraging private care for the elderly, while local authorities seem to be going the other way.

"It's a real shame because Chester-le-Street deserves a facility like this, and County Durham in general needs one.

"With care homes closing all over the North-East, a new generation residential home like this would have provided an important service."

The 50-metre long building would have been an imposing sight near the middle of Chester-le-Street.

Every bedroom would have been en-suite, at least 12 sq m in size, and the home would have provided between 60 and 70 full and part-time jobs in the town.

Nearby residents welcomed the new home.

However, many were worried that an increase in traffic through Hopgarth Gardens would have ruined their quality of life.

Another concern was that youths would play in the potentially dangerous ruins of the former county council depot.

Mr Oates said: "We demolished the former depot because it was beginning to attract youngsters and we wanted to stop the disturbances.

"We are trying to make the site as safe as possible because people were becoming concerned about kids playing on the building site.