TORIES are challenging claims up to £3million would be clawed back if developers behind a controversial Southend seafront cinema and leisure scheme are axed.

Tony Cox, Southend Tory leader, is to ask a series of questions after Labour councillor Matt Dent claimed £3million would have to be paid back to Homes England if the Seaway development fails to go ahead.

The Echo asked the Government body to clarify its position and a spokesman confirmed grants totalling £2.85million would have to be repaid if the scheme was withdrawn.

However, Mr Cox dismissed Mr Dent’s claim, insisting: “It is a red herring because the council has not had any talks with Homes England about what would happen if it went out to tender again with a like for like scheme but with more parking.

“This is a question I am going to be asking at scrutiny committee because there is so much confusion. Would they really pull the plug if someone came forward with a similar scheme?”

At a full council meeting this week, Mr Dent warned dropping plans meant the council may have to return about £3million.

Homes England, formerly the East of England Development Agency, said it provided an initial £2.3million grant and a further £550,000 to demolish the Rossi factory and homes in Herbert Grove for new housing within the scheme. This was later changed to provide a landscaped area with the agreement of Homes England.

Following questioning by the Echo, a spokesman for Homes England said: “Subject to the usual planning process, we are not aware of any reason why this scheme should not go ahead as planned.

“However, if for any reason the scheme was withdrawn, the full amount of investment would need to be repaid.”

The council has recently extended the agreement with developers Turnstone. This has been bitterly opposed by seafront traders who say there will be a loss of parking.

The potential financial losses could be seen as reason why the Independent, Labour and Lib Dem-led coalition is maintaining its support for the Turnstone scheme.

Ian Gilbert, Labour council leader, said: “It is one reason among several. It is a lot of money for the council to lose but it’s not the main reason.

“I’m not proposing to break the contract at this stage as there would be a loss of business confidence and a loss of confidence with those considering investing in Southend if we break this while considering a live planning appeal.

He said chances of finding a developer without planning consent was slim, partly because of “hostility and political games”.