A COMPANY estimates it has lost hundreds of thousands of pounds because of the way the council has dealt with the handover of its new premises.

Caribbean Scene was due to open a restaurant in Gerry Raffles Square, Stratford, after successfully bidding for Unit 2 in 2004.

The authority's failure to finalise the lease and an ongoing legal wrangle between the council and developer Barratt left the company in limbo The Guardian understands the dispute is over claims that the units, which form part of the Heights development, were not built to agreed specifications.

All the units, which were supposed to contribute to the regeneration of the area, remain empty nearly five years after they were built.

After receiving confirmation in 2004 that the company's bid for premises was successful, managing director Patrick March said the council repeatedly stalled on providing the paperwork to finalise the deal.

The council informed him some time later that live music and entertainment, an integral part of the original business plan, was not allowed in the restaurant.

Mr March was confused and angry after a meeting with council officers a few weeks after the Olympic decision in July last year.

He was asked to sign a document specifying that anything discussed could not be used in any subsequent legal action and was told that a process had started to check the integrity of the company's plans.

Mr March said: "I felt the meeting was designed to make us walk away from the project.

"They started talking about potential noise problems and the need to consult residents. We had addressed the noise issue during the original bid and planned to soundproof the building.

"They suggested it could be a problem venue, but we had taken great care to manage the whole project properly. We were so outraged and left feeling numb.

"The delays have not only cost us hundreds of thousands of pounds, but also affect the reputation of the business and the potential benefits for the area."

Mr March is hopeful a recent meeting with council chief executive Dave Burbage will signal the end of his "nightmare".

Barratt said the issues over the shop units were "minor matters" and should be resolved shortly.

A Newham Council spokeswoman said: "Through no fault of Caribbean Scene, the process has taken a long time.

"Regrettably the council is not yet in a position to complete the lease as there are issues relating to the completion of the units prior to letting and the council has not yet taken ownership.

"The council is in ongoing discussions with the developer and Caribbean Scene Limited in order to progress the matter to conclusion."