Cherwell District Council has been forced to bail out £70m plans to revamp Bicester town centre following a slump in the global economy.

Council officials have not disclosed the details of the rescue package, but it is believed to run into millions of pounds and the project is now not expected to be completed until 2011 - at the earliest.

The redevelopment between Manorsfield Road and Sheep Street will include a cinema, Sainsbury's superstore, shops, bars and restaurants, parking for 526 cars and a new library.

It had been due to begin earlier this year after receiving Government approval last September.

But delays in signing off a deal with Town Centre Retail - a partnership between local developer Stockdale Land and J Sainsbury - has left the project on shaky ground.

Bicester and District Chamber of Commerce chairman Keith Watson told the Oxford Mail he supported the council's investment, but warned traders should expect tough times ahead.

He said: "Naturally we are concerned with the time it is taking - the town centre looks tired and if we are going to compete with other towns we are going to have to do something.

"We are in a difficult economic climate, but if we don't tackle the town centre now, we are looking at another six years on top of the time we must already wait."

District and town councillor Les Sibley, however, expressed concern over the council's decision. He said: "I'm a little bit gobsmacked the council is having to come to the rescue of these private developers to move the project forward. It sounds like a desperate situation."

Mr Sibley said the high cost of borrowing had probably stalled the project.

David Marriott, head of economic development and estates at the district council, said the economics of the original plans had been "compromised".

In a report due to go before the council's executive on Monday, he said: "Since the scheme was approved, the national economy and the property market have changed, resulting in reduced demand for commercial investment property and investment values.

"While it might have been possible to address this issue by reducing the content of the scheme, the council's project board agreed an alternative approach should be taken to ensure all the approved elements could be delivered.

"This requires the council to make a financial investment in return for an increased return and would produce a somewhat different final ownership structure than originally envisaged."