YORK council leader Steve Galloway has sought to quash rumours that Terry's chocolate factory will easily fall into the hands of residential property developers.

Coun Galloway said he wanted to put out the message that the council would "vigorously" resist a substantial part of the site being used for anything other than industrial or manufacturing use.

It would only consider a change of use planning application for site when all such possibilities had been exhausted.

Experts have said that the 33-acre site, situated in a prime and prestigious location next to York Racecourse and close to the A64, could be worth £50 million if it could be redeveloped as apartments. However, its value might fall to less than £20 million if sold for employment use.

But Coun Galloway insisted that for planning purposes, the site was set aside for commercial and industrial use.

"There is very large barrier to be jumped for anybody who aspires for that site to be used for anything else," he said.

"Anyone thinking large blocks of flats will be built on that site does not understand the way the planning process works.

"It is extremely unlikely the York council would wish to do anything other than have job, creating industry on that particular site."

He said the first step was to see if Terry's could be persuaded to reverse its decision and stay on the site.

If that proved impossible, there were a number of smaller firms in York which were looking to expand, and this was a possible location they could move to.

Previous efforts by the council to retain industrial use on other key sites in the city have been in vain. Efforts were made to keep both the former Tenneco factory in Rawcliffe and the former Donnelley site in Boroughbridge Road in manufacturing use, but no buyers were found and residential development went ahead.

But Coun Galloway insisted that this was a very different situation, not least in that the local plan process was further down the line, and there had been no attempt to change the site's designated use.

He conceded there might need to be "flexibility" with some of the old, listed buildings, which might not be attractive to employers, but he said this was only a minority of the site.

Updated: 11:53 Thursday, April 22, 2004