The deal will create an Urban Regeneration Vehicle (URV), which is a company into which Croydon Council will invest land and John Laing will invest equity and expertise.

The Company is a Limited Liability Partnership with the council receiving an equal 50/50 share in the profits. They will also maintain ongoing control of their city regeneration agenda through their interest as a partner-landowner as well as through utilising their planning powers.

The deal is a reflection of the public sector’s ongoing quest for innovation from commercial partners to help maximise returns from their assets.

The URV partnership has a 25 year term and its initial remit is to provide the phased regeneration of four important town centre sites including but it has the option to add additional sites into the partnership as and when further development is required. In total the four intial sites will create approximately 1,250 new residential units, to be delivered between 2012 and 2017. The plans also include The Odalisk, (pictured above) a proposed £350m mixed-use development featuring a 4 star hotel, residential units and office space in two towers of 31 and 51 storeys.

The project will deliver a brand new headquarters office building for the council and they have already placed a deposit on an adjacent office block which will be incorporated into the new URV Company. It is anticipated that the council's land value and share of development profit will be sufficient to pay for the new headquarters and its running costs for a considerable period of time into the future.

The development of URVs could provide a blueprint for the many council's that are facing similar challenges with large scale regeneration projects and have sizeable land holdings to use as a bargaining tool with investment companies.

Other councils thought to be working up similar proposals are Sunderland, Newcastle, Birmingham, Carlisle, Dudley and Newham.

The withdrawl of funding, and subsequent collapse, of the King Alfred scheme on Hove seafront (see earlier story ) makes it clear that new development vehicles will have to be identified as the private sector retreats into its shell for the duration of the coming recession and possibly beyond.