The redevelopment of the Elephant & Castle Shopping Centre could take place earlier than planned, but a final regeneration deal between Lend Lease and Southwark Council has now been delayed till June.
The expectation at that time was that the binding regeneration agreement would be signed during March.
Now a report prepared for next week's meeting of the Southwark Council executive asks for permission to extend negotiations until June, pushing a final decision to the other side of the borough elections in May.
That means that the process of concluding a final agreement with Lend Lease will have taken nearly three years since the Australian company was selected as Southwark's preferred development partner in July 2007.
However, the delay to the deal could mean that an important component of the regeneration will be able to move forward more quickly than expected.
Last year the council published a revised programme for the regeneration scheme which saw the Elephant & Castle Shopping Centre moved to phase 6 due to a lack of certainty about the intentions of the centre's owners St Modwen.
Since then talks have been held between Southwark Council, St Modwen and Lend Lease about the future of the shopping centre.
"These discussions are exploring options on how to bring the shopping centre forward at an earlier date than might have been the case," says the report by council officers to the ruling executive.
"These discussions have been positive and officers are hopeful that an agreed position between all parties will be possible. However, as agreement has not yet been reached, officers request an extension of time until June 2010 to try and complete these negotiations."
The document also reveals that a proposal for a new leisure centre at the Elephant & Castle will be prepared for the executive in June.
"We are in a position where we would be ready to sign a deal in April," says Cllr Tim McNally, Southwark's executive member for resources.
"All of the substantive negotiations are now complete and it's now just a matter of signing the agreement and the legal dotting of Is and crossing of Ts.
"However at this late stage St Modwen have come to the table – seeing that the deal is about to happen – and said 'What about us?'
"It would be foolish – given that you only do this deal once – to ignore that possibility of getting them to come along as a third partner as we always hoped they would."
Meanwhile preparatory work for the demolition of the Rodney Road and Wingrave blocks of the Heygate Estate has begun.
Southwark Labour leader Cllr Peter John said: "This is an abject failure. After eight years of waiting for something to happen at Elephant & Castle, the reality for the local community today is that they are as far away from seeing the vital improvements to their area as they ever have been. The Lib Dems promised much, but dithered, delayed and have delivered next to nothing."
He added: "My promise to residents around Elephant & Castle is that if elected in May Labour will put new leisure facilities and a new town centre back at the heart of this regeneration plan. Labour will deliver."