Proposals for a £370m energy park on the edge of the city centre have been halted, with the company behind it owing £3m to creditors.

And the University of East Anglia, a member of the company's board, has set aside £1m to pay back between 50 to 60 investors, who will only get back about a third of what they put in.

Norwich Powerhouse, set up to oversee the creation of Generation Park, between Thorpe St Andrew and Whitlingham, revealed at the end of November it was struggling to secure investment.

The project had been backed by the UEA, which put £2.25m into the project, and energy company E,ON, which had put in £1.4m. But, after the board called in an insolvency practitioner, a Company Voluntary Arrangement has been approved.

Its creditors have agreed to get back 33p for every pound they invested. If an investor comes forward in the future, the project could be resurrected.

It is understood investors had considered putting more in, but the interest has not yet been followed up with actual investment. E.ON is understood to still be considering its next move.

So, for now, the scheme, which was due to include a straw pellet-burning plant, 120 new homes, student accommodation, an education centre, a research base, 11 acres of parkland, plus new cycle routes and walkways, has been shelved.

A spokesman for the UEA confirmed £1m had been set aside to pay investors and that the scheme had been 'mothballed'. so it could be revitalised if private investment was forthcoming.

The proposal, with its 90m-tall chimney, had attracted criticism. More than 250 people had objected to the planning application which had been lodged for the scheme.

Campaigners, including from the group Say No To Generation Park had expressed concerns about possible pollution from the plant. Developers had said the height of the chimney would disperse emissions far from the city.

Broadland District councillors, who are being consulted on the plan, last year decided to defer their decision on whether to grant permission, saying they needed more information on the environmental impact of the plume which will come out of the chimney.

And Norwich City Council, which, along with the Broads Authority, would have to grant planning permission before the scheme could go ahead, had also commissioned its own independent expert advice on air quality to help it in determining the planning application.

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