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The planned £150m revamp of an estate in Hull has been scrapped following the government's spending cuts.

Plans to demolish high rise blocks of flats and build hundreds of new homes on the Orchard Park Estate were recently approved by the city council.

The authority was bidding for £150m from the government's Private Finance Initiative for the scheme, but has now been told it will not get the cash.

The council had spent £1m drawing up the plans and consulting residents.

Last week Hull's Gateway scheme, which aimed to demolish rundown housing in the city, came to a halt after central government withdrew its funding.

Lib Dem councillor Rick Welton, the council's portfolio holder for regeneration, said: "I think coming on top of the Gateway funding collapse this is really very, very disappointing news.

"We were holding out hope that there would still be some housing regeneration going on in Hull.

"The government slashing this one off has really made life very very difficult, not just for us as a council but more for the residents of Orchard Park."

Dean Robinson, who lives on the estate, told ³ÉÈË¿ìÊÖ News: "It's knocked me for six really because it would have been perfect for the estate."

Diana Johnson, the Labour MP for Hull North, said: "This dire news sets the needs and aspirations of Orchard Park residents for better housing back for many years.

"This decision is yet another coalition kick in the teeth for Hull's local economy, especially the construction sector, and a setback for skills training opportunities for local youngsters."

Grant Shapps, the housing minister, said: "The money has run out, this country doesn't have the money to spend and so some things are having to take a bit longer or be reworked in other ways.

"But we won't walk away from areas.

"We want to work with the local leadership to make sure that they can describe a future for estates like this and we'll be right alongside trying to do whatever we can."