TOP councillors are set to agree to use compulsory purchase powers against a York business, so they can push forward the city's massive Hungate development.

City of York Council's ruling executive has been advised to authorise a compulsory purchase order (CPO), after attempts to negotiate a deal with York Bedding failed.

The CPO would be funded by the developers, Hungate Regeneration (York) Ltd, so has no financial implication for the council or taxpayers.

A CPO has never been used by the council since it was formed in 1996.

But last February, the executive agreed in principle to use its powers if negotiations with York Bedding were unsuccessful. Council officers say a stalemate has now been reached.

In a report to the executive, the authority's principal city development officer, Derek Gauld, wrote: "Negotiations between the landowner and developer have not managed to reach agreement on an acceptable acquisition price, and the developer of the site has formally asked the council to exercise its compulsory purchase powers."

If York Bedding objects to the order, it will go to an inquiry.

The land in question is at the junction of Garden Place and Carmelite Street.

Mr Gauld said it was part of the wider multi-purpose Hungate development, which includes homes, offices, shops and a new headquarters for the council.

He wrote: "If the land is excluded the development will have to be redesigned and a significant part of the development will be lost."

He said continuing to rely on attempts to negotiate a settlement would "introduce risk to the overall project".

Council leader Steve Galloway said: "The council still hopes that we will reach agreement before inquiry.

"If it does go to inquiry and it is accepted, York Bedding Company will receive an appropriate and substantial payment in terms of compensation.

"The council has discussed alternative sites with the owners, and offered assistance and guidance to relocate. But they have not, as yet, been minded to progress discussions."

Coun Galloway said the development would provide 720 homes, including 146 affordable ones, and 500 jobs.

"The importance of this development to the future economic prosperity of the city should not be underestimated, and therefore we want to press ahead with it as soon as possible."

No one from York Bedding wished to comment.