THE Government has refused to intervene in the row over plans to relocate York's Arc Light homeless centre to the former Shipton Street School.

Housing Minister Yvette Cooper told York MP Hugh Bayley that the location for such a hostel was a local issue.

"It would be inappropriate for me to get involved in or comment on this matter," she said. "There is no official guidance."

She also said the Government had offered in principle £850,000 this year and £1.65 million for 2006/07 towards the Arc Light project, as part of the £90 million Hostels Capital Improvement Programme.

Mr Bayley claimed the £850,000 could not be rolled forward to next year, and the city council needs "to get its skates on" and consult the public over the proposals - or risk losing the money.

"If the £850,000 is not spent this year, it will be allocated to another local authority because the Government wants to ensure improvements for homeless people happen this year and are not delayed."

But both Labour and Liberal Democrat councilors insisted today that the authority must not be rushed into making a decision of critical importance for decades to come.

A Government spokesman said a decision had not yet been taken on what would happen if the funding could not be spent this year, saying the situation would be reviewed if that situation arose.

The Shipton Street proposals have prompted furious protests from local residents.

The Evening Press wrote an open letter to Deputy Prime Minister John Prescott on Monday, calling on him to help resolve the bitter dispute by extending the deadline for funding, to ensure that residents' voices are heard and alternative sites can be fully investigated.

Council leader Steve Galloway said today he was disappointed by Mr Bayley's claims that the funding could not be rolled over, but said he suspected that Ministers were "somewhat distant" from the local situation in York.

He said: "The council won't be rushed on a matter which will impact on the city for decades to come. It's most important we get the right decision."

He also claimed Mr Bayley was inconsistent in telling the council to "get its skates on", as he had also asked the authority to come up with a choice of sites for the facility.

Clifton councilor Ken King, who has deep concerns about the Arc Light proposals, said he was also disappointed by the funding news, and said he would agree with Coun Galloway that the decision must not be rushed. "It's too important not just to the Clifton area but to the whole city for that to happen."

Dave Nicholson, chairman of the joint committee of Clifton Residents Association, said it was crucial that the right decision was taken without the pressure of meeting a funding deadline.

"Full consultation must take place - and allow for the important social factors we have outlined," he said. "In any event, Shipton Street school site remains completely inappropriate for this project."

Updated: 10:37 Saturday, September 24, 2005