A project to regenerate Hollymoor Lane has been delayed after a housing association withdrew.

Rosebery Housing Association is no longer working with Epsom and Ewell Council to regenerate the site where the Sefton Arms pub once stood, in the heart of the Longmead estate in Ewell.

The council is now taking the lead on the project, which had an £80,000 investment for short-term improvements, such as clearance of the site, last year.

Epsom councillors will now take part in a working group set up to attract a new developer and improve the appearance of the site in the short-term.

Liberal Democrat Councillor David Buxton said: “A working group is really good news.

“It does seem as though we might be able to attract investors and end the stalemate we’ve had to deal with for so many years.

“A group of individuals entirely focused on this project can only be a good thing.”

According to the Liberal Democrat group, the council has been in touch with the public and private sector. There have been expressions of interest and the possibility of community development funds to improve the look of the whole site until permanent plans are under way.

The existing planning permission for the site expires in February 2011 and councillors are expect a new project will be put forward.

An Epsom and Ewell Council spokeswoman said: “The Hollymoor Lane site was put on hold by mutual consent between Epsom and Ewell Council and Rosebery Housing Association in January 2009, as reported to the strategy and resources committee at the time.

“The costs of regenerating the site are not yet known. The recommendation that a working party be set up to take forward the redevelopment of Hollymoor Lane was agreed at the strategy and resources committee.”

A spokeswoman for Rosebery Housing said: “Rosebery is building 230 new affordable homes in the Epsom and Ewell area by 2013, and are extremely committed to improving the environment and services available to local residents.

“Unfortunately on this occasion, due to the economic downturn a decision was taken not to develop at Hollymoor Lane.

“As a prominent landlord in the area, we look forward to working with the new developers and will provide support in any way we can.”