BLACKBURN'S market halls could be demolished and replaced with a new landmark building as part of a multi-million pound development plan.

Blackburn with Darwen Council has signed a deal with major London-based construction firm Bovis aimed at regenerating the borough for the next five to 10 years.

Work will include redevelopment of the Penny Street market site and its possible demolition to make way for a better-equipped building with extra retail units.

But it has received a mixed reaction from market traders.

In the first five years of the deal with Bovis's Inpartnership arm, the council hopes to have identified ventures with a combined worth of £50million, with initial projects starting next year.

The deal is also said to provide better value for money for ratepayers and lower risks for the council because of the use of private money.

The Blackburn Infirmary site, which is due to close in 2006, is also set to be converted into flats and apartments with new houses built nearby as part of the deal.

Blackburn with Darwen Council leader Sir Bill Taylor said: "This is a very exciting step forward for the borough. It adds a new dimension to our successful regeneration programmes, which have already brought many thousands of new jobs and hundreds of millions of pounds of new investment to the borough."

The alliance, following the Government's push to encourage Private Finance Initiatives, will see Bovis invest money into projects like the market development with the council putting up land and property. Commercial returns on developments will then be divided between the two.

The deal is similar to one set up by Hyndburn Borough Council in 1995. Nigel Rix, a council director, said the deal between Hyndburn, a local businessman and Nelson-based Barnfield Construction led to a six per cent net increase in local employment.

Projects carried out in Accrington under the partnership include the Viaduct development, which features a ten-pin bowling alley and cinema and the Globe Centre, a renovated mill now housing offices, restaurants and a gymnasium.

Founded in London in 1885, Bovis pioneered construction in Britain and has expanded into 19 European countries.

Duncan Sutherland, managing director of Inpartnership, said: "One of the main issues that attracted our interest in Blackburn is the progressive nature of the council and their innovative approaches to tackling its regeneration."

Blackburn with Darwen Conservative leader Colin Rigby said the partnership would reap rewards for the town. "The information I have suggests this was something Blackburn needed and it could be used to our advantage."

Bovis has already signed similar partnership deals with councils in Salford, Leicester and Fort William in Scotland.

Anne Winnard, who has worked on hosiery and underwear stall, Haydock's, for the past six years, said: "I think the market hall could do with refurbishing or maybe even moving to another site, although I don't know where.

"But if it is to be refurbished what happens to us all in the in-between time?"

Susan Holden, 45, owner of the Market Hall Snack Bar for the past three years, said: "I think it is quite a bustling little market.

"In the three years that we have been here, we have seen our trade go up. But I do think that there should be free parking."

Garry Easton, 50, of G Hargreaves & Sons Fishmongers, who have been in the market since the 1930s, said: "There have been rumours flying around for six or 12 months over the possibility of re-siting us. Blackburn used to be one of the easiest town centres in the country to travel through, but since they closed Church Street it has become a nightmare.

"I believe that we need a shoppers' car park and some on-street car parking.

"A new building may attract new people but I don't think it is addressing the basic underlying problems."