THE collapse of a multi-million pound building contract for the refurbishment of a historic York building has been branded “hugely disappointing” and a major set-back.

Opposition Labour councillors have hit out after it emerged that City of York Council bosses have pulled the plug on a contract with Interserve.

The deal would have seen the Guildhall complex - which includes the medieval Guildhall itself as well as the Victorian city council chamber and offices - undergo a £9 million overhaul.

Labour’s finance spokesperson in York Cllr Neil Barnes said it was disappointing to see the project “hit the buffers” three years after the Conservative and Liberal Democrat joint administration took it over.

Cllr Barnes said: “In 2015, for political reasons alone, they started to unpick a project which was already well progressed. Now we see the project if not back to square one, certainly set back years from where it should be by this stage.

“Most worryingly there seems to be no plan B, while all the time the Guildhall is failing to make income as it has in the past. The Coalition needs to get control of the project, get on with it and stop wasting taxpayers’ money.”

Conservative council leader Ian Gillies, who is now overseeing the project, said he did not want to engage in “back and forth” with Labour over the project, but when that party had controlled the council before the 2015 elections it had drawn up plans for the Guildhall involving high-tech routed through historic listed buildings.

He added: “This is not back to square one. We are seeking the best outcome for the city.”

In a statement released on Monday evening, council director Neil Ferris said the contract had been drawn up with a “break point” after its first stage to protect the city from spiralling costs.

This also means that work Interserve has already done will not be “wasted nor repeated” by the final contractor, Mr Ferris added.

He said the authority was still committed to the Guildhall development, but would be looking at ways to cut costs before making a decision in May.