The riverside site has stood empty since 1999

Sunderland's former Vaux site, which has been derelict since 1999, has been the subject of a long-standing battle.

The former brewery site is owned by Tesco and it and regeneration company Sunderland arc want to develop it.

The Office for the Deputy Prime Minister has now called in Sunderland arc's plans, which means a decision will be made by a government inspector.

Arc wants to build offices, two hotels, houses and shops on the site in a �280m scheme. Last year, Sunderland City Council gave its backing to the plan.

Lynch-pin

Tesco's �150m plans include a store, hotel and apartments but at the time the council made the decision on the arc plans, it said it was waiting for more information before it could move on with Tesco's application.

Business leaders reacted with disappointment to the news the plans had been called in.

North East Chamber of Commerce chief executive George Cowcher, said: "This is a deeply frustrating situation.

"We now have yet another time-consuming chapter in the ongoing lack of development of the former Vaux site. It is a thorn in the side of the city because the old brewery site is the lynch-pin in the overall aims to regenerate Sunderland."

He said it would have been better for the two sides to work collaboratively on the project to determine the matter in the region without national government causing delays.