Gladedale Capital's £25 million plans for the centre of Westhill include extending the town's shopping centre by 32,500 sq ft, creating two new wings, a glazed canopy and more than 300 parking spaces.

Stewart Whyte, the local community council chairman, met with Gladedale Capital earlier this month where he was told the development was being put on hold because of the current financial climate.

He said: "It is disappointing that the ambitious £25 million development has been put on hold, however, Westhill is not immune to the recession. I accept Gladedale's assurances that they remain committed to Westhill and their plans will come off the drawing board once conditions improve. In the meantime Westhill is still an excellent place to shop. The recent closure of Somerfield in Banchory has seen an increase in custom from Deeside and I am sure some of these people will continue to use Westhill once the store reopens."

Gladedale Capital have applied for funding from the Scottish Government's Town Centre Regeneration Fund to help kick-start the project – a move that has been supported by Westhill and Elrick Community Council.

Mr Whyte added: "Due to the recession and banks not willing to loan, Gladedale have put the development on hold until conditions improve but they are committed to Westhill and are carrying out low cost interim improvements this year. We are supporting their bid to the TCRF so that the infrastructure part of their plan can go ahead and this would facilitate the expansion of retail units.

"One good thing about the delay is that they are negotiating short-term leases for the units that are currently vacant. These are expected to be opened by August - one is a cafe and the other a local business."

And Gladedale Capital confirmed they remain committed to the multi-million pound project.

Martin Smith, development director at Gladedale Capital, said: "Gladedale Capital is committed to the proposed redevelopment of Westhill Shopping Centre and our application for funding from the Scottish Government's Town Centre Regeneration Fund demonstrates we remain dedicated to delivering a centre which meets the requirements of the community.

"Should our application be granted, we believe implementation of these first phase plans will be key to delivering the wider redevelopment of the centre.

"Our plans have the backing of both Aberdeenshire Council and retailers and we look forward to a decision by Scottish Ministers to allow us to commence work as soon as possible."