FOURTEEN households and a school in a quiet cul-de-sac could help determine the future of York's massive Derwenthorpe scheme.

But rumours that they have been offered up to a quarter of a million pounds each not to stand in the project's way have been emphatically denied.

The residents live in the privately-owned end of Fifth Avenue, which the Joseph Rowntree Foundation wants to use as one of four access routes into the 540-home model village.

While councillors this week gave their backing to the scheme, officers have warned that if the applicants sought to develop the site with fewer access points, a new planning application would be required.

But the foundation's hope of using Fifth Avenue have been stalled since residents and St Aelred's Roman Catholic Primary School turned down a compensation offer in 2003.

The foundation said then that, as it was subject to scrutiny as a charitable organisation, it was not in a position to raise its offer, and asked City of York Council to consider issuing a compulsory purchase order (CPO).

That has not yet happened, and a leading councillor, Coun Quentin Macdonald, said this week he was not in favour of a CPO at this stage, without studying the matter in more detail.

Chartered surveyor John Reeves, who represents residents and the school, said he will now meet them to seek their views on the way forward.

He flatly dismissed rumours of a massive compensation offer, saying he had not received any approach; however, if the foundation wanted to make progress, it should re-open negotiations.

He said residents lived in the area because they liked the absence of traffic, and their lives would be significantly affected by Derwenthorpe, particularly as Fifth Avenue would be one of only two access roads for construction traffic.

He claimed the compensation would need to reflect "compelling evidence" that the proposal had already had a substantial impact on the value of local properties. There must also be improved safeguards, for example to protect residents' ability to access their driveways and to protect pedestrians' safety.

Foundation spokesman Nigel Ingram said he would lead negotiations over Fifth Avenue, which he conceded was one of the biggest remaining hurdles to be overcome if the current scheme was to go ahead in full.

The other key potential obstacle was the possibility of a public inquiry, although the foundation felt the scheme was robust enough for the Government not to call one.

He also dismissed the rumours of a massive offer to residents, but did not rule out the possibility that increased compensation might be offered, saying circumstances may have altered in the last couple of years - for example changes in the values of properties.

However, he stressed that the foundation remained subject to restrictions as a charity, giving it less freedom for manoeuvre than commercial developers might enjoy.

Updated: 10:05 Friday, February 04, 2005