CASTLE Leisure Centre has been saved from the bulldozers - after plans to build a new supermarket in Bury town centre were shelved.

The U-turn has also earned a reprieve for a diving club, who were set to move out of the area if the proposal went ahead.

A project to build a new supermarket on the site of Bury's old police headquarters, in Irwell Street, has stalled because a lack of demand for large stores from retailers, revealed council officials.

The original plan was to sell the old police station to a developer for the new supermarket, which would be built on the site of the old police station and Castle Leisure Centre, and to use the proceeds of the sale to fund a new leisure centre to be built in Knowsley Place, opposite Bury Town Hall, above the Q Park car park.

However, Castle Leisure Centre will now remain open for the foreseeable future which is good news for the Bury Dragons Diving Club. The club had launched a campaign calling on council bosses to rethink the plans, as it would have left the club without a place to train.

Head coach Janet Ward said: "It is very positive news for us and will allow us to carry on, because there is really nowhere else we could have moved to.

"Manchester is out of the question, as it is difficult to get to after school, so this is great news for the club."

Demolition work of the former police station is set to start at the end of January and run until mid June, with residents being informed of possible disruption.

Cllr Sandra Walmsley, Bury Council cabinet member for resource and regulation, said: "The major supermarket operators have suddenly decided to scale back their expansion plans, and all the evidence suggests that they now are concentrating on developing much smaller outlets, with the result that it now seems unlikely that a large food store will be built on this site in the foreseeable future.

"The council and its development partner, Ask Real Estate, are therefore considering other redevelopment options for the police headquarters site.

"A smaller development will mean, however, that there is no longer a need to relocate the Castle Leisure Centre and consequently it will remain in its current location."

The council said it was too early to say what form the development of the old police headquarters site could take.

Cllr Walmsley added: "We remain committed to regenerating the area between Bolton Street and Jubilee Way and the demolition of the former police HQ is an essential step in this process.

"We are currently working up some exciting new proposals for the site and will consult on these widely as soon as the viability studies are completed.

"In the meantime, we can assure local residents and businesses that all possible steps will be taken to minimise disruption during the demolition works."

In June 2010, the borough’s police force left Irwell Street for a new £16 million base just a few hundreds yards away in Castlecroft Street.