LOCAL opposition to a £50 million development at Leith Walk in Edinburgh was last night thought to be the reason for the University of Edinburgh pulling out of the project.

The controversial £50m plan to build a hotel, student flats and homes at Stead’s Place on the famous thoroughfare has been thrown into doubt after the university, its major supporter, pulled out.

The university confirmed yesterday that it is no longer part of the Stead’s Place project but the main developer, Drum Property Group, says it will continue with the project.

Earlier this year, councillors on Edinburgh’s development management sub-committee unanimously refused planning permission for the demolition of well-known red sandstone buildings to make way for the development.

The council cited numerous reasons for the refusal, principally stating that the proposed new development did not properly replace the current building.

Drum Property Group has lodged an appeal with Scottish ministers against the decision and says it will continue with its proposals to demolish the site to make way for 471 student flats for postgraduates, a 56-bedroom hotel and 53 affordable homes.

The university appeared alongside Drum Property Group at the committees, but yesterday a spokesperson said: “The university has kept a close interest in the proposed plan for Stead’s Place and, after giving it careful consideration, has decided not to pursue that interest any further.”

Community campaigners have strongly opposed the development, led by the Save Leith Walk group, and a petition was set up to campaign against the development.

Sources in Edinburgh say the university’s withdrawal was prompted by concern among senior staff that Drum Property Group had failed to address concerns of the community and the council that the development would have a negative impact on Leith.

Save Leith Walk said yesterday that the university’s decision had come too late for those Leith Walk businesses who have been forced to shut.

The remaining businesses – Leith Depot, Cassia, the Punjabi Junction and Leith Walk Cafe – are expected to close their doors by the end of the year.

A Save Leith Walk spokesman said: “We are surprised that the University of Edinburgh has terminated its partnership arrangement with Drum Property Group to build student accommodation in Stead’s Place, Leith Walk.

“We appreciate that the University of Edinburgh has finally acknowledged the concerns of our community.

“Unfortunately, this has come too late for many of the local businesses in Stead’s Place that have been forced to close.”

Green councillor Susan Rae said: “I really welcome this news. It’s a testament to the skill, dedication and determination of the Save Leith Walk campaign and demonstrates that the university has listened to the community and learned.

“It is time that Drum Property Group did likewise. First their proposals were rejected by the community, then by the full planning committee – now their preferred accommodation provider has pulled out. Those voices need to be listened to and respected. Save Leith Walk has earned that.

“Drum should abandon its planning appeal to the Scottish Government, which will drag the process out for months. Instead, we need a fresh start at Stead’s Place, one which works with the ambitions of the people for mixed affordable housing, adaptable facilities, local business and green space – a community. Open the shops and sit down and talk – with grace and a bit of vision.”

Graeme Bone, group managing director of Drum Property Group, said: “Since purchasing the Stead’s Place site in 2017, we have been delighted with the high levels of interest in the innovative student and hotel elements of our proposals from a range of potential operators, including the University of Edinburgh.

“We are close to selecting our preferred operating partner.”