Yarmouth's casino hopes appeared to be a busted flush last night as Gordon Brown suggested that other forms of regeneration may be a better bet for pulling run down areas out of the doldrums.

Yarmouth's casino hopes appeared to be a busted flush last night as Gordon Brown suggested that other forms of regeneration may be a better bet for pulling run down areas out of the doldrums.

Odds on the town's chances of securing a multi-million pound casino lengthened after the Prime Minister admitted the government's controversial gambling policies were being reviewed.

Mr Brown, a son of clergyman, appeared to stamp his own moral authority on the issue and signal the first break with Blairite policy

In a stage-managed question from a Labour backbencher - who presented the issue as a question of faith, Mr Brown said: “This is an issue on which there is no consensus found in the two Houses of Parliament. And it is an issue now subject to reflection over the next few months.

“In September we will have a report that will look at gambling in our country - the incidence and prevalence of it and the social effects of it. I hope that during these summer months we can look at whether regeneration in the areas for the supercasinos may be a better way of meeting their economic and social needs than the creation of supercasinos.”

Church leaders welcomed the move last night.

The Bishop of Norwich, the Rt Rev Graham James said, if true, “it sounds as if common sense has broken out.”

“Gambling can be addictive, has increased substantially in recent years and offers illusions to the poor,” he said. “That's why I've never been able to understand why big casinos are supposed to help combat deprivation when it's perfectly possible they may increase it for some families.

While Manchester won the race to house the country's first super casino, Yarmouth was one of 16 towns earmarked for a smaller venture.

Insiders fear the review means the issue is dead in the water.

Council chiefs in Yarmouth have viewed the prospect of a large casino as an economic bonanza bringing up to 1,500 jobs and £40m of extra annual revenue as part of a wider development, including hotels, conference centres and leisure facilities.

Council leader Barry Coleman said: “We had originally been led to believe that the government would make an announcement to push forward with the casino scheme and bring it back to Parliament immediately after the local government elections.

“Our concern is being left in limbo as the casino is the third plank of our development alongside the outer harbour and schemes brought forward by the urban regeneration company 1st East. Although casinos are not a panacea it is the regeneration they bring that makes us support them.”

Albert Jones, managing director of the resort's Pleasure Beach, who is campaigning to deliver the casino as part of a massive leisure complex next to his theme park, last night remained upbeat about the prospects. He said: “From the feedback I have been getting from the casino industry I am 99pc sure Mr Brown is only talking about the single regional casino.”