Work on a new multi-million pound hotel development in Southampton has been put on hold by developer Ocean Village Resorts (OVR) due to the current economic downturn.

The £60m scheme, which was given the green light by Southampton City Council (SCC) planners in July, includes the 13-storey, 224-bedroom Millennium Ocean Village Hotel and a waterfront events piazza. Other facilities incorporated in the development include a restaurant, a cafe bar, a spa and health suite and a conference and events floor, as well as a marina control centre.

Tony Keeler, chief executive of OVR, said: "This decision to defer has come about as a consequence of the current deteriorating economic conditions in these uncertain times. "We will continue to monitor and review this decision and it is anticipated that at some point in the future we will be in a position to recommence works on the project.

"Ocean Village remains a priority for the company's development plans and work behind the scenes will still continue. The planning and design phases of the hotel development have been successfully completed." SCC's cabinet member for economic development, Royston Smith, said: "Businesses, developers and other investors throughout the UK are finding it difficult to raise funding – due to the impact of the cautious behaviour of funding institutions and with the temporary glitch of credit drying up.

"But there is continued confidence in Southampton and the city council will continue to work with developers and their partners to support their development schemes."