DEVELOPERS have halted work on part of a town centre building in a row over £500,000 of public funding.

AMK has threatened to leave the old post office on Regent Street in limbo if they cannot back out of a deal to create jobs in exchange for the cash.

The firm was given the funding for its project on the proviso the property was used for mixed office and residential use.

But bosses have had a change of heart and now want to restrict the development to flats only. European funders, Objective One, has told AMK it will have to pay the money back if it scraps the planned business space.

In retaliation AMK has stopped all work on the inside of the building and is prepared to leave it unfinished because bosses believe the grant cannot be clawed back if the project is frozen.

Director Barry Connell says offices were only part of the overall aims for the future of old post office. He maintains AMK has already done a good job for Barnsley by restoring a run down listed building, which was an eyesore on one of the main routes into the heart of the town centre.

He said: “This has been a struggle for us and we do not want to lose the money. This has not been our failure, local businesses in that area have not come forward.