CHEF and businessman Paul Heathcote has mothballed £1m plans to launch a high-end restaurant in Manchester city centre, citing the consumer downturn and the credit crunch.

The Lancashire entrepreneur is instead focusing on his Olive Press chain of restaurants, which offers good value Italian fare in a casual dining format.

The Elliot project was to have replaced Simply Heathcotes, which closed in March after 12 years, and had been scheduled to open in October.

Construction work has now stopped, and Mr Heathcote says he won't take a decision to restart it until next year.

He said of the postponement: "I have reached this business decision as I do not believe now is a good time for a high end restaurant opening. I believe there is more demand for Olive Press at the moment.

"The decision on the Elliot is the right one at the present time and I will re-consider this decision at the stat of the New Year."

Problematic

He said the site within the listed Elliot House had proved `problematic' and that costs had escalated amid a'`nervous trading market due to the credit crunch.'

He said his investment will focus on the Olive Press chain with a number of new restaurants opening in the north west in the middle of 2009.

The Manchester Oliver Press is currently undergoing a £200,000 refit, he added.

Mr Heathcote's announcement came as the leisure sector continued to feel the pain from the consumer spending slowdown. Last week north west pub company Cains went into administration. Further problems are on the horizon too as banking giant HSBC is reportedly drawing back from lending to bars, restaurant and hotel groups.

It is thought that HSBC made the move to clamp down on offering finance to the sector as these groups are increasingly seen as risky investments.

DEFYING the gloom though is Manchester's Individual Restaurant Company which today announced a new £18.5m revolving credit faculty to fund its expansion plans. The John Dalton Street company, which runs the Piccolino and Restaurant Bar & Grill brands, is opening seven new sites this year.

IRC, which operates 30 restaurants, has continued to trade well despite the tough market conditions.

This year the company will open six new Piccolinos. Sites have already begun trading in Birmingham and York and others will open n Hale, Aberdeen, Bristol, and Clitheroe.

A further seven sites have been identified for development nationwide in 2009.