A project to create one of the largest high-quality business parks in Norfolk has been dealt a blow after �1.5m of funding was withdrawn.

The East of England Development Agency (EEDA) had committed the money to a 44-acre enterprise park alongside the A11 in Thetford.

But following the news that regional development agencies (RDA) are to be scrapped in a government shake-up, the organisation has said it is unable to commit to funding beyond the end of the current financial year.

Earlier this year Breckland Council, which is leading the project alongside private landowners the Crown Estate, met a previous funding gap by injecting an extra �900,000 into the project, bringing its total investment in the Thetford Enterprise Park (TEP) to �2.9m.

The future of the project is now unclear.

A spokesman for Breckland Council said: 'We have recently received the unfortunate news of the withdrawal of �1.5m funding towards the cost of the Thetford Enterprise Park.

'We will of course need to discuss the implications of this with the other partners involved to look at future options for the project and cannot comment further until these discussions have taken place.

'The site has attracted considerable interest from companies looking to move to the area and remains a key employment development opportunity.'

The park was hoped to attract scores of specialist firms to occupy 750,000 sq ft of commercial floor space and, along with the dualling of the A11, bring about a change in economic fortunes for the town.

It was expected to create up to 1,000 jobs and safeguard even more within the town, while acting as a catalyst for further growth along the A11 corridor.

Steve Cox, executive director at the East of England Development Agency, said the agency's budget had been reduced by �25m, or 24pc, in the 2010/2011 year.

He added: 'Current restrictions on RDA spend for longer-term projects has forced EEDA to take the tough decision of withdrawing funding earmarked for the Thetford Enterprise Park.

'On-site complications, including power capacity issues, resulted in the project being undeliverable in the time-scales required for EEDA funding.

'EEDA has worked alongside Breckland Council and the Crown Estate to explore all possible alternatives to progress the project before taking this difficult decision.'

MP for South West Norfolk Elizabeth Truss said it remained important for Thetford to attract businesses to the area. She said: 'I think the Thetford Enterprise Park is really important as Thetford is ready for this.

'What we've heard is that there are people interested in investing in Thetford because of the A11 dualling but we need sites for those businesses to locate to.

'We need to attract businesses to the town and Thetford Enterprise Park has to be part of that.'