IKEA are pulling out of a deal to come to Lancashire due to ‘economic reasons’.

The Swedish furniture giant is due to take a unit on a 65 hectare site in Cuerden, which is being developed to provide employment, retail, housing and leisure facilities.

The site is expected to create around 4,500 new jobs in a variety of sector including office, retail, manufacturing, logistics, catering and hospitality.

Richard Rands, IKEA UK and Ireland Property Manager, said: “After careful consideration, IKEA UK and Ireland has decided not to progress with the planned development of an IKEA store at Cuerden Strategic Site.

“Our decision is due to increased development costs and delays outside of IKEA’s control which no longer make this location viable.

“We will continue to look for new sites and opportunities in this area as part of our commitment to expansion in the UK. At IKEA, we want to be more accessible, bringing our unique home furniture expertise and product range closer to more customers, and we look forward to exploring new opportunities.”

Leader of Lancashire County Council, Cllr Geoff Driver said: "IKEA have notified us that they wish to withdraw their plans for a new store at the Cuerden development site.

"This is extremely disappointing and we will hold discussions over the next few weeks with IKEA, the main anchor occupier for the retail element of the strategic development site at Cuerden.

"All parties agreed to the timescales more than a year ago and we have been working together consistently to meet all deadlines.

"We appreciate that there is a current state of uncertainty in the UK retail market generally, and we know there have been rising costs.

"However, this still remains a great investment opportunity.

"The site is in a very sought after location, right on the motorway network with planning consent already granted.

"Lancashire County Council will continue to work hard with their partners, the Eric Wright Group and Brookhouse, to ensure they reach the best possible outcome for Lancashire."

Meanwhile, campaigners against the scheme are celebrating the news.

John Jones, of Limit Cuerden said: “The news of Ikea pulling out of the Cuerden development is a relief for thousands of South Ribble residents living near site.

“Their lives would have been ruined by huge increase in traffic on a road network ill prepared for a development of this scale.

“The mitigating highways improvement measures that were proposed would have done little to stem the daily gridlock we already experience in Lostock Hall.

“What a tragedy is that hundreds of trees have already been cleared from the site leaving a terrible blot on the landscape at the end of the M65. We would be interested to know how this is will be made good in the interim.

“The news that hundreds of jobs will not now be created and the wider scheme is in jeopardy is less welcome.

“Limit Cuerden has been realistic in the knowledge that this site was always going to be developed.

“It’s been earmarked for over 20 years.

“We wanted it done in a way that respected the local communities surrounding it.

“We sincerely hope that whatever is next for this land that residents will be properly consulted and appropriate traffic measures to cope with the demand will be included.”

Meanwhile, Cllr Alan Cullens, who represents the Cuerden area, believes Ikea pulling out could have an impact on the Market Walk development in Chorley town centre

He said: “It now puts the development in question and it goes hand in hand with what is going on on our high street.

“There are lots of difficulties in the retail sector.

“It also calls into question the Market Walk scheme as there are other developments happening. There is one on Botany Bay.

“What will happen with the Market Walk as shoppers like choice and they may want out of town centre shopping so big names may sign up there even cinemas.”