A developer has admitted defeat in her bid to buy a town centre pub to help make way for a £10million flats scheme.

Talks between local pubs supremo Margo Grimshaw and Thwaites brewery over the sale of the Sun pub, Higher Church Street, Blackburn, have broken down.

Ms Grimshaw has been trying to buy the venue from Thwaites for the past two years, so that apartments can be built on the site as part of the £10million Cathedral Court project.

Building work is already underway on the scheme that will see about 79 flats built in the town centre over the coming years.

Thwaites has now confirmed that the pub will be staying put.

And Phillip Price, who runs the venue with wife Bernadette, said he was pleased there was no longer a question mark hanging over its future.

But Ms Grimshaw said: "We have got to the stage where they wanted more for it than would have made it viable.

"I am very disappointed, not because it makes a great deal of difference to the project as a whole but from an aesthetic point of view it will have an effect.

"The one thing that does concern me is that area in the future. It will be difficult to bring up to date because it's going to be landlocked."

She said getting hold of the land would only have added about five or so apartments to the scheme. And she revealed that potential buyers had already put deposits down on five apartments - half of the first phase, which is due for completion in November.

About 80 wagon loads of earth will be removed per week for the next three weeks to dig out the underground car park for the development.

Mr Price, said: "The whole thing has upset my wife quite a lot, so I do hope it is the end of it. The brewery rang to say that she had been in and given her final offer, and from what I have been told, they are not in negotiations any more."

A spokesman for Thwaites said: "We have been talking to Margo over a period of time but unfortunately we have not been able to agree a mutually acceptable deal, so the pub will stay as it is."

A number of pubs and clubs in Higher Church Street and Market Street Lane will make way for the development.

Originally, plans to knock down the former Bar Code pub, now Grind, in Higher Church Street, were included in the plans which also involve building flats in Market Street Lane.

But plans for Grind have now been shelved.