EXETER'S economy was delivered a massive boost with news that work on the 2,900-home Cranbrook new town near the city could start this year.

The work would create hundreds of jobs and set the ball rolling for other major projects, including Sky Park, predicted to create 7,000 jobs.

Cranbrook developers have been so pleased with the progress of negotiations so far that they see first stage work on the multi-million pound project starting in the next few months, with house-building getting under way in 2010.

The news comes after reports that the new community planned near Rockbeare could have been delayed for up to five years due to the credit crunch.

Key developers in the scheme, including Persimmon Homes, have said the development could only be completed when "the time is right" but improved forecasts have changed the outlook.

The Cranbrook New Community Partners, made up of Hallam Land Management, Taylor-Wimpey, Persimmon Homes and Redrow Homes, say they are so "pleased and encouraged by the positive ongoing negotiations and dialogue" with local councils and the South West Regional Development Agency that they could see the start of primary infrastructure works later this year and housebuilding operations on-site during 2010.

Nick Duckworth, of Hallam Land, said: "There remain a number of bridges to cross.

"However, if the current positive and constructive approach is maintained by all parties, we should reach agreement in the very near future and we will be delighted to see this major scheme move forward, even against a back-drop of this very challenging period."

Simon Perks, managing director of Persimmon Homes, said: "It is testimony to the commitment of all parties that a way through is close to being found. We are pleased, too, that development remains comprehensive and will deliver all of the elements of the planning package including, schools, affordable housing, public open space, the neighbourhood and town centres.

"We look forward to the prospect of delivering much-needed housing in the east of Exeter expansion area."

The early-day infrastructure will include the provision of the Clyst Honiton by-pass and access to the proposed new station at Cranbrook.

There will also be a community centre, possible temporary doctor's surgery, primary school and a number of shops.

At the heart of the discussions between the development consortium and the local authorities has been the development agreement provisions, from affordable housing to sustainability.

A spokesman for the partnership said: "Getting Cranbrook started will not just be about the housing development.

"The key elements of the early-day infrastructure will not only create jobs within the local construction economy, but will also assist in bringing forward the further developments of Skypark business district, the intermodal rail freight facility and distribution Centre, expansion of Exeter International Airport and Exeter Science Park."

The 107-acre Skypark site, to the north of the airport, is owned by the county council and will bring 7,000 new jobs.