ONE of Scotland's biggest retail developments has been thrown into doubt by a legal challenge over the ownership of the Edinburgh site.

Edinburgh City Council has said it remains fully supportive of the landmark £850 million Edinburgh St James project despite the challenge to a compulsory purchase order needed to carry out the works.

Demolition of the St James Centre in Edinburgh was to begin this month as part of the redevelopment. It was not immediately clear whether the challenge would affect the development timetable.

A report that went to Edinburgh city councillors last month said the majority of compulsory purchase orders (CPOs) had been agreed and negotiations were progressing well for outstanding land acquisitions.

The revamped site will eventually feature a 210-room hotel, 30 restaurants, luxury apartments and a multi-screen cinema.

Edinburgh St James is a 1.7 million sq ft city centre development and one of the biggest regeneration projects currently underway in the UK.

It will provide 850,000 sq ft of retail space, five star hotel accommodation and will deliver up to 250 new private residential apartments.

The new commercial, retail and residential district is forecast to support more than 3,000 permanent jobs.

But the dispute over the process that allowed developers TH Real Estate, the developers the right to purchase the site is to be fought out at the Court of Session.

Jersey-registered Grosse Investments that collects ground rent from a portion of the site occupied by the John Lewis store, is appealing against the outcome of a government convened CPO inquiry in February.

Lawyers acting for Grosse have said that the firm was not seeking to block the development's progress but wanted to protect their lease thought to be worth £600,000 a year.

Gavin Barrie, convener of the the city council's economy committee said: “We are aware that a statutory challenge has been submitted to the Scottish Government. However, the council remains committed to this landmark new development for Edinburgh, which will create thousands of permanent jobs and will add £25 million to the Scottish economy each year.”

Martin Perry, TH Real Estate's director of development said that the arguments were dealt with "very thoroughly" during the inquiry and that support was given because the investment "is in the wider public interest".

He added: "We remain totally confident of delivering what is one of the UK's largest city centre retail regeneration schemes."

Edinburgh city council had anticipated that demolition would start this month with an expected completion date of 2020.

Demolition was expected to take 18 months before work begins on a new shopping complex, cinema and restaurants.