The final two building phases of the Houndshill Shopping Centre have become the latest victims of recession.

The £30m first phase – including the Debenhams store – opened last September and planning permission for two huge stores, car parking and a 63-bedroom hotel and restaurant was granted in 2006.

Council bosses have now said they do not believe the scheme will go ahead in the foreseeable future.

Blackpool's shopping heartland has been ranked as one of the worst hit by the recession, with almost a quarter of shops in the centre of the resort standing empty.

Peter Callow, leader of Blackpool Council, said: "The Houndshill development has done a lot to draw shoppers into Blackpool and the Debenhams extension was meant to be the first of three phases.

"It is hard to imagine the other phases will happen in the foreseeable future in this economic climate and Preston's proposed Tithebarn shopping project is another worrying spectre on the horizon.

"We are here to fight for Blackpool's future, however, and will put every obstacle we can in the way of this development."

The North West Development Agency has already earmarked £600,000 for the scheme to enable Blackpool Council to buy properties to make way for development.

Coun Callow said: "ReBlackpool is continuing to buy up properties which they feel are suitable but we are in recession and this is not the right time for this development."

Modus, the Manchester-based owner of Houndshill, went into administration in June after failing to meet debt repayments.

Administrator KPMG says Modus's financial position will not affect individual developments.

But Houndshill manager John Holt said: "The second and third phases of the development have been put on hold as we wait for news of our new owners. How long this will take is anybody's guess.

"We have new businesses coming into Houndshill like Orange and Deichmann shoes, so all the signs are encouraging."

The retail report has been released by researcher Local Data Company, which shows 21 per cent of Blackpool's shops empty. Out of 387 stores in the resort's town centre retail core, 82 are closed.

Traders fear the picture could get bleaker unless action is taken to secure the resort's retail future.

Kasia Laplata, from Smokers Choice on Bank Hey Street, said: "So many of the shops round here are closed, there's nothing to bring shoppers to this part of town."

Paul Stirzaker, of Greenwoods on Abingdon Street, said: "We've been hit by a double whammy of the redevelopment works keeping people out of town and the recession closing shops, it's no wonder profits are down."

Trader John Waide, from Abingdon Street Market, said: "I think the council's priorities are wrong and it is spending money in the wrong places.

"All the cosmetic work is useful, but what's the point if there's nothing in the town centre to draw people in?"

In neighbouring Preston, just 12.3 per cent of shops lie empty, while in Manchester the figure is 14 per cent.