A NEW Year's Eve threat made by a York company to pull out of a deal to bring jobs to the former Thrall Carriageworks site has been called off - for the time being.

Holgate Rail Industries (HRI) has agreed to more time to settle a dispute over a five-acre strip of waste ground - the main stumbling block in a £10 million deal to carry out maintenance on rail support vehicles at the former York carriageworks site.

Nigel Box, HRI director, said discussions on a vital rail link on land owned by Yorkshire Forward would continue "immediately after the New Year" - but warned the regional development agency was still sticking to its view.

The Evening Press revealed the land is so key to HRI that chiefs had threatened to pull out of the deal, due to bring up to 250 jobs, if it could not be secured by today.

Yorkshire Forward is believed to be holding on to the site to provide a potential base for Jarvis if it moves from Leeman Road.

The future success of the huge York Central development is dependant on the rail company moving elsewhere, although no move has yet been agreed.

Mr Box said the scheme was still under threat. He said: "The situation is still unclear as far as we are concerned. Yorkshire Forward is still sticking to its view to use the land for the benefit of York Central.

"But discussions will now continue in the New Year and we are hopeful there may be some avenues to find an agreement.

"We are hoping we can use influence from Network Rail to help us overcome the problems. They may be in a position to help us."

City of York Council leader Steve Galloway said he was grateful that there was more time to aid discussions. "Obviously the council is continuing to try and find a solution on the site which satisfies not only both HRI and Yorkshire Forward but other potential issues of access," he said.

"Any additional time that is available is very helpful in terms of trying to solve that particular problem. I hope an agreeable solution can be found."

Updated: 10:11 Wednesday, December 31, 2003