A DEVELOPMENT agreement for the Arcade site has been signed, giving preferred bidder St Modwen the go-ahead to draw up detailed plans for the long-derelict eyesore.

The developer intends to submit a planning application in the spring for a mixed-use leisure, retail and housing scheme. The plans will be subject to the council's usual planning process, including consultation.

St Modwen were named as the council's preferred bidder last year, and early conceptual plans revealed in September proved controversial because they featured a "landmark" 18-storey tower.

A council spokesman said financial responsibility for the site was transferred at the beginning of this week, but a price would not be agreed until later this year. He said the scheme's final value will be determined by the planning process.

The council's cabinet member for enterprise and investment, Cllr Terry Wheeler, said: "This is a tremendous start to the New Year for Walthamstow and I am very pleased that we have signed this development agreement.

"I look forward to seeing the detailed design work for this crucial gateway development and moving into the next stage of this vital scheme."

St Modwen's development director Nick Kay said his firm was talking to a major retailer and a cinema operator.