A potential obstacle to Redcar's Coatham Links scheme has been hurdled after the Secretary of State decided not to intervene.
The controversial plans were approved by Redcar and Cleveland Council's planning committee last month.
But Government Office North East (GONE) had to refer it to Ruth Kelly, Secretary of State for Communities and Local Government, because it deviated from the Local Plan.
She could have "called in" the scheme in to determine herself had she been concerned about breaches of planning policy.
But she has decided not to "call-in" the scheme, meaning it can be dealt with locally.
The council hailed the decision "a major step forward in the regeneration of Redcar". Campaigners, who say the scheme is too housing-led and question whether money is available to fund it all, were pinning hopes on a public inquiry.
The council says Ruth Kelly's decision allows them to "go ahead and support the delivery of the scheme ( the most ambitious regeneration scheme in the recent history of the town."
Cllr Mark Hannon, nominated as the Cabinet Lead for economic development in the council's new administration, said: "We are now in a position to support the delivery of this multi-million pound development which has the potential to bring about a major change in the face and fortunes of Redcar - and promises the creation of new jobs, the provision of new leisure and shopping facilities and the arrival of new residents and families.
"However, we must acknowledge that the proposed development at Coatham Enclosure has been subject to controversy ( so we must bring people together to deliver this major exciting new scheme. And, as demonstrated by the Secretary of State's decision not to call in the application, we can be confident that the development is in-line with all national planning policies.
"We now look forward to working with our partners and residents to make real the promise and opportunity of the development and secure the new leisure and health facilities the families, young people, residents and businesses of Redcar want and deserve."
A letter to the council from GONE, confirming the decision, states: "The Secretary of State concluded that her intervention would not be justified as there is not sufficient conflict with national planning policies or any other sufficient reason to warrant calling in the application for her own determination."
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