The current economic climate has delayed the start of the regeneration of the Memorial Stadium.

At a board meeting this morning the directors unanimously agreed to delay the scheme for 12 months to ensure best value and to give certainty and credibility to the redevelopment.

The Opal Property Group, the club's preferred student provider has withdrawn from the scheme due to the current "credit crunch".

Chairman of Opal, Stuart Wall said: "We are extremely sorry we have had to withdraw from this project at such a late stage. We have worked with Bristol Rovers for over a year and everything was in place to proceed, but the credit crunch is seriously affecting our sector and we have had to take this into account. However, I am confident other operators in our sector will be very interested in this development and we wish the club every success."

The club were informed of Opal's withdrawal over a week ago and immediately opened talks with another party in an attempt to maintain the current timescale of the project.

It is therefore very disappointed that this information was reported on the internet, without referral to the club for comment, as it did not help the club's negotiating position.

John Newland of project managers Gleeds said today: "The news of the student accommodation provider pulling out at this late stage is very disappointing.

"The uncertainty of the current economic climate had a big part to play in this decision no doubt. Opal cannot adhere to the commitment made with regard to funding. The club has worked closely with Opal throughout this project and it is very sad indeed that they should withdraw at such a late stage, especially when we had taken account of all of their needs and requirements into the design.

"We have now received tenders for the project which are only slightly higher than the club wished, but this situation can be addressed through minor value engineering of the design, construction methodology, and negotiation with the preferred bidder and the sub-contract package contractors. The process of reconciliation is well under way with the preferred contractor."

Bristol Rovers vice-chairman Nick Higgs said: "We are extremely disappointed to be placed in this situation so late in the day, especially after all the hard work put in by our team it is difficult to accept. We did not expect this and there was no sign of it happening.

"However, we acted swiftly and opened discussions with another student accommodation provider, but unfortunately agreement could not be reached over the weekend. The club has decided therefore to go back to the open market, which will result in a delay of 12 months.

"Negotiations with the banks are at a detailed stage and we have agreed terms with Cheltenham Town and Bristol Rugby. We have commissioned a full business plan for the income generated from the new Memorial Stadium facilities, this has been produced by Pan Leisure and the projected income streams have exceeded our expectations.

"We have an agreement to lease premises close to the Memorial Stadium for the temporary club offices and shop. In addition, negotiations with incoming tenants for other parts of the new Memorial Stadium are progressing well. All these agreements will have to go on hold until we can agree terms with an alternative student accommodation provider."

Director Edward Ware added: "Given the news of increased costs generally, and with banks taking a tougher stance on lending, I suppose we should not be surprised that developers are feeling the pinch. We were expecting contracts to be signed off at this time and instead we have now to go back to the open market to obtain another student accommodation supplier.

"As a result of the credit crunch, we recently sought assurances from Opal as to their commitment to the development and these were very positive, so this announcement came to us as a great shock.

"Opal's requirements have been fundamental to the design of the new stadium and we have had to ensure that their specifications were met in return for a major part of the funding of the development. The agreements with Bristol City Council and UWE have also taken account of Opal's requirements and they have played a large part in these and other negotiations. These agreements may now have to be re-visited when the new student accommodation operators are on board."

"We must not be too downbeat. We have a wonderful project here and the tenders we have received prove it is feasible to fund. This is a setback, but contrary to media speculation over the weekend, one that we will get over, with the development proceeding at the earliest opportunity. The regeneration of the Memorial Stadium is key to the future success of Bristol Rovers and we hope everyone will pull together to ensure it takes place."

Bristol Rugby Club and Cheltenham Town have always been aware that the redevelopment and relocation issues are subject to the receipt of feasible tenders and the confirmation of project funding. Both parties have been advised of the setback and work will commence immediately on upgrading the Memorial Stadium pitch to ensure it is ready for the start of this coming season.

The club will contact all supporters who have already bought their season tickets to arrange transfer to the appropriate seating at the Memorial Stadium for the start of the season.