SLOW progress" is being made on the transformation of Worcester's Tallow Hill, nearly two years after a regeneration scheme was made public.

Worcester City Council's policy and resources committee will meet in closed session tonight to "consider the basis for the council's involvement as landowner".

The authority owns the land at Tallow Hill car park, as well as George Street car park, part of which is affected by St Modwen Developments' plans.

The developers want 110,000sq ft of retail floorspace, approximately the area covered by two football pitches.

Although councillors criticised the firm's plans for lacking imagination, they approved the application "in principle" in February and sent it to the West Midlands Government Office because of the possible impact on the city centre.

The Secretary of State for the Environment, John Prescott, decided not to call a public inquiry.

"We're still in negotiation and making slow progress," said the council's head of development planning, Peter Yates.

"The plans have come back to the city council for a decision by either the planning sub-committee or technical services committee this autumn."

He said the council was "struggling" to reach agreement over highways issues in particular.

Under the scheme, which was unveiled in October 1998, George Street would be straightened so the road ran directly to the junction of Tallow Hill and Shrub Hill Road.

"We have to resolve the treatment along the canalside, including new mooring facilities, a new footbridge and a new road bridge," Mr Yates added.

Tallow Hill car park covers a Victorian cemetery, where more than 4,000 bodies lie buried.

"I don't know if the bodies are deep enough down so the road can go over the top or whether some of them would have to be re-interred elsewhere," said Mr Yates.

No one from St Modwen Developments was available for comment.