The government has decided to scrap plans for a super-casino

The city won the bid to develop a Las Vegas-style casino in east Manchester 13 months ago but the plan has been scrapped following a government review.

City council leader Sir Richard Leese said he was "disappointed", while Simon Ashley, council Lib Dem leader, said Gordon Brown had "sold Manchester out".

A ministerial group is to help create a regeneration package as compensation.

According to Sir Richard, a regional casino would deliver around 3,500 new jobs for east Manchester, regarded as a deprived area, and would also bring millions of pounds in investment to the area.

'Irrefutable evidence'

"We are disappointed with the announcement," he said.

"We believe a regional casino provides the best regeneration benefits for east Manchester and we will continue to pursue this.

"We have put irrefutable evidence to the government that demonstrates a regional casino in a properly regulated environment can bring major benefits to an area like east Manchester."

Gordon Brown has single-handedly stopped the creation of 3,000 jobs and �265m of investment in east Manchester. He has sold Manchester out Cllr Simon Ashley Leader of city council Lib Dems

Less than three weeks ago the city council said it would consider taking legal action if the government decided to axe the super-casino, a move Sir Richard has refused to rule out.

Mr Ashley said: "Gordon Brown has single-handedly stopped the creation of 3,000 jobs and �265m of investment in east Manchester. He has sold Manchester out."

Graham Stringer, Labour MP for Manchester Blackley, declared the decision "outrageous" and said he would support any legal action by Manchester City Council if it wanted to seek a judicial review.

Angie Robinson, chief executive of Greater Manchester Chamber of Commerce, also expressed concern at the announcement.

"This is not good news for Manchester," she said. "We are disappointed that there has been no specific mention of what will be done for Manchester to compensate this loss.