THEY are scratching their heads in the cafes and muttering in the pubs.

Few things have raised the ire of people in the market town of Barnard Castle, County Durham, so much for years.

The question they are all asking is how did it go so badly wrong?

Everything looked so different two-and-a-half years ago, when Safeway announced plans for a £15m supermarket, with the promise of 70 jobs.

But negotiations with Teesdale District Council to buy a strip of land vital to the project, measuring a mere ten metres by six metres, broke down last summer.

Safeway refused to budge after the council changed its mind about selling the land for £80,000.

The new asking price was said to be as much as £200,000.

The authority has consistently maintained that local government regulations, saying councils must look for the best possible price for its assets, forced it into the move.

But, yesterday, after the sale of the strip of land to a rival bidder for £150,000, Safeway launched its attack.

"Teesdale District Council are not doing themselves any favours," a Safeway spokesman said.

"They have ruined the prospect of 70 new jobs and more trade in Barnard Castle. This just seems to be a quick solution to save face.

"We have plenty of other sites to develop, and we will not be looking at investing in Barnard Castle in the near future."

Charles Anderson, chief executive of Teesdale District Council, said: "We wanted this resolved as quickly as possible because it has gone on long enough."

But the potential loss to the town from the failure to strike a compromise has left residents of the market town describing the situation as a farce.

"It's very disappointing," said restaurant owner Bill Oldfield, 43, who lives and works in Barnard Castle.

"A new superstore is something that both residents and traders would have benefited from.

"People in the area will now continue to shop at bigger towns, such as Darlington and Bishop Auckland, where the big supermarkets are, and this means the economy of Barnard Castle will suffer. It is very sad news."

Andrew Park, 27, who works in Barnard Castle, but lives in Darlington, said: "It seems to have been a farce from start to finish. I think the future of Barnard Castle depends heavily on the number of visitors it can attract, and its ability to raise its profile from that of a quiet market town.

"A lot of people I have spoken to are angry about the whole issue, because it has gone on and on and we still seem to be nowhere."