CITY leaders have pledged to do everything in their power to ensure the vital £200 million Friars Walk development goes ahead.

And that could even mean the council itself making an investment in the project.

It is understood that the company behind the scheme are looking for new investors after potential backers were hit by the global financial crisis.

But, despite hitches and delays to the major project, Modus has not shelved the Newport project - unlike others around the country.

Cinema chain Vue has only recently signed to operate the multi-screen cinema and Modus has continued to let the retail space with 74 per cent of the scheme now taken up.

The scheme is a key element of the regeneration programme for the city centre.

Council leader Matthew Evans said: "People have been waiting decades for this and I can understand the frustration and a degree of cynicism and scepticism. It is vital that everything possible is done to progress the scheme.

"From a council perspective it is not a question of 'will it happen?' this scheme has got to happen. It's a must."

Managing director Chris Freegard said he was heartened that Modus, and the stores such as Debenham and M&S that are already on board, clearly had faith in the city as a location in which they could invest and make money.

It is believed Modus itself is putting a substantial slice of its cash into the scheme.

Cllr Evans explained they had said they would do whatever they could to ensure the scheme went ahead.

Mr Freegard explained they were unable to give a grant under European state aid rules.

But they were looking at ways they could close any potential funding "gap" if there was one after Modus had secured further funding from private investors.

"The city is being very enterprising and entrepreneurial by looking at the various options," added Mr Freegard.

He did say, however, that they were very careful about where they invested.

"It is the people's money, not the council's money, and we look after it on behalf of the people of the city."

He said whatever they did it would be necessary to make sure safeguards were in place and they benefited from any profits.

"If you ask people for their three priorities, shopping centres come within that top three. The council is listening to what people want and seeking to fulfil their dreams and ambitions."

Cllr Evans said they could not underestimate the importance of the scheme for the regeneration of Newport.

PANEL 1 Work was originally expected to start on Friars Walk last year. It is now hoped workers will be on site in mid to late 2009.

With the compulsory purchase process, planning permission and road infrastructure completed - and a new multi-storey car park due to be finished in the Spring - everything is in place for the scheme to go-ahead when the company have the necessary finance.

Its plans included new stores, cinema, restaurants and apartments.

However, there is now doubt over at least part of the residential phase of the project as the slump continues to take its toll on the housing market.

PANEL 2 Although some major residential projects in Newport are being delayed and affected by the credit crunch - such as the massive St Modwen scheme for Llanwern - it is not all doom and gloom.

Westmark are continuing with their Newhaus scheme on the Old Town Dock site and the first phase of the ambitious City Vizion on the riverfront near Rodney Parade is also under way.

The impressive Orb office development on the George Street site is almost complete and work is due to start before Christmas on the much anticipated University of Wales, Newport's city centre campus.