Ravenscraig was closed in 1992 and demolished four years later

Lord Carloway has ruled that North Lanarkshire Council acted beyond its powers when it approved the �1bn plan in March.

Two firms which have invested heavily in the centres of nearby Hamilton and East Kilbride raised a legal challenge.

The plan estimates that up to 12,000 jobs will be created in the new town.

The British Steel works at Ravenscraig was the embodiment of Scottish industry and shut in 1992. The 1,100-acre site - along with its iconic towers - was cleared four years later.

In November 2003, the Scottish Executive granted a decision to approve an alteration to the structure plan for North Lanarkshire which gave "town centre" status to Ravenscraig.

September hearing

But Standard Life and Land Securities lodged appeals against the alteration of the structure plan at the Court of Session.

Those cases will be heard in September by three judges.

The two companies also contested North Lanarkshire Council's decision in March to approve permission for the new town.

The plant became symptomatic of the decline in heavy industry

The blueprint proposes 3,500 houses along with schools, transport links, business and industrial parks and a large retail centre.

They said it would adversely affect shops in the centre of Hamilton and East Kilbride.

Lord Carloway said the issue of permission in the circumstances was "a step which no authority acting reasonably could have taken, at least until it could be satisfied that the appeals had no reasonable prospects of success".

"The alteration (to the structure plan) does not just change a general policy which might have relevance to the application site," he continued.

"It deals specifically with that site and its classification as a town centre."

He ordered that the March decision was null and should be set aside.

This type of court action taken by Standard Life and Land Securities, which is based on commercial self interests, is a frustrating delaying tactic Jim McCabe North Lanarkshire Council

But Jim McCabe, leader of North Lanarkshire Council, stressed that the decision did not mean an end to the Ravenscraig scheme.

Mr McCabe said: "Work on this development will press ahead.

"Ravenscraig represents a major economic benefit to the whole of Lanarkshire and this type of court action taken by Standard Life and Land Securities, which is based on commercial self interests, is a frustrating delaying tactic."

A statement issued on behalf of Standard Life Investments and Land Securities said: "We believe the designation of the Ravenscraig site as a Town Centre, with an associated leisure and retail component of around 1 million square feet, would severely undermine the existing retail centres of Hamilton, East Kilbride, Motherwell and potentially, given the scale of the proposals, centres further afield."

He added that the council was reviewing the findings of the court but said that "nuisances like this" could be expected as part of a project expected to take up to 20 years to complete.

Scottish Conservative MSP for Central Scotland, Margaret Mitchell hit out at the local authority for "blatantly disregarding" local structure plans.

"It is back to the drawing board for the council - and time for them to actually listen to the people of Lanarkshire," she said.

Executive survey

Meanwhile, a five-year retail development survey by the Scottish Executive shows that more shopping floor space has been built in or near town centres than on out-of-centre sites since new guidance was issued in 1998.

The survey of all developments with a floor area above 1,000 square metres revealed that 55% were in town and edge of centre locations.

This compares with 45% in out-of-centre and out-of-town locations.

Deputy Communities Minister Mary Mulligan said: "A good mix inside towns has benefits for transport, the environment and quality of life.

"But we also recognise that for some people, other centres are convenient."