Elephant & Castle Shopping Centre will be demolished after all

Two years ago we broke the news that the centre's owners St Modwen – with the blessing of Southwark Council – proposed to refurbish and extend the existing building rather than pursue a wholesale redevelopment.

Later, St Modwen revealed plans to built up to 1,000 homes above the existing structure.

Now the demolition of the 48-year-old indoor shopping mall is back on the agenda.

The news was revealed by Cllr Fiona Colley, Southwark's cabinet member for regeneration, during her annual interview with the borough's cross-party overview and scrutiny committee on Monday night.

"The big thing we have agreed with the Greater London Authority and St Modwen is that the shopping centre will be demolished," she said.

She added: "We've made it clear – and the GLA has made it clear – that we are expecting a scheme to come forward that involves full demolition of the shopping centre.

"Now we're in discussions with St Modwen about how that might work."

Regeneration director Steve Platts told the committee that council officers would be working with St Modwen on an "open book" basis to examine the viability of development on the site.

Cllr Colley said: "To be clear about this, I haven't been happy with what St Modwen have been coming forward with in terms of affordable housing [and] in terms of design..."

She issued a warning to the centre's owners: "We do have within our agreement with Lend Lease a fallback position of using compulsory purchase order powers."

Committee chair Cathy Bowman pointed out that it is not long since the administration had been making "bullish" statements about the idea of retaining the core of the shopping centre rather than demolishing it and asked what had prompted the change of heart.

Cllr Colley explained that the agreement of Transport for London and the Mayor of London to go ahead with plans to replace the Elephant & Castle roundabout with a pedestrianised 'pensinula' and new escalator access to the Northern line had been a "game-changer" in terms of the future of the shopping centre site.

Mr Platts added: "As the refurbishment scheme developed further, we had more and more concerns about the details of the scheme and ... it became less and less attractive."

Lib Dem committee member Cllr David Hubber said: "This is very welcome news.

"Obviously there is a long way to go in regards to sorting out the detail and legal issues, but it takes us back to the original concept in the Liberal Democrat plan which was to demolish the old centre and build a brand new one."

Before winning power in the 2010 local elections, Southwark Labour leader Peter John had insisted that "demolishing the shopping centre … is absolutely central to starting a new chapter for Elephant & Castle".

A spokesperson for St Modwen said: "We remain committed to the redevelopment of the shopping centre and are keen to progress our plans with the London Borough of Southwark and establish how we can deliver a viable scheme that will offer long term benefit to the regeneration of the Elephant and Castle area."