Scottish Enterprise is talking to its partners about the next stage of the £1.2 billion scheme for the former Ravenscraig steelworks site in North Lanarkshire.
The masterplan for the brownfield site envisages the creation of a new town with 3,500 homes, 216,000m2 of business and industrial space and 84,000m2 of retail and leisure. But only phase one - comprising 800 homes, a leisure facility and a campus for Motherwell College - is so far under way.
Ravenscraig Ltd, a joint venture between Barratt Developments, Corus and the enterprise agency, has previously expressed concern about a delay in committing £2.8 million of public funding required for site exploration and preliminary work.
Now the Scottish Government has admitted that a review is being carried out. "Scottish Enterprise has invested more than £20 million in the first phase and is continuing to work with its private sector partners and the local authority to develop proposals for phase two," a spokesman said.
He added: "We are currently considering how best to take this development forward in the light of market changes."
Ravenscraig director Jim Fitzsimons warned that any significant hold-up in the development could jeopardise the public-private joint venture. "You cannot turn the taps on and off as and when you want because the private sector will just walk away," he said.