Plans to create a new town with up to 2,000 homes on the former MG Rover site at Longbridge could be delayed for years because of the slump in land and property prices, a developer warned.

The derelict car factory, which ground to a halt after the collapse of the famous marque in 2005, is set for a £750 million transformation which will create 10,000 jobs and mix modern houses with parkland.

Initial plans projected that it would take at least 15 years to complete the biggest regeneration scheme ever seen in the West Midlands, meaning it could be complete as soon as 2023.

But at a public inquiry into the plans, Jason Tait of landowners St Modwen said progress could be slower.

“There might be some growth in the market in the next 18 months or two years but it’s not clear how it might have an effect on land prices,” he said.

“That is a key factor driving this project and we would have to hold on to the land until land prices went up.

“That would obviously have a dramatic effect on our ability to deliver units until later in the process.”

Mr Tait said although St Modwen jointly owned the land along with regional development body Advantage West Midlands, parts of it were likely to be sold to smaller developers to help fund the project.

Land prices were likely to lag several years behind and recovery in the property market, he warned.

He added: “Some of those developers have a backlog of land and property which they haven’t been able to work on and that will slow things further. “It’s difficult to project when we will be able to deliver the units at value.”

Blueprints mapping out architects’ stunning visions for a futuristic village centre on the banks of two rivers, landscaped parks and an £84 million college were unveiled earlier in May –- three years after MG Rover went bust with the loss of 6,000 manufacturing jobs.

The new owners, China-based Nanjing Group, are using a small part of the remaining factory and the first of its revamped MG TF cars rolled off the production lines earlier this year.

The firm announced recently that it intends to double both production of the model and the total number of jobs at Longbridge next year.

The two-week inquiry will determine whether changes should be made to the Area Action Plan which was drafted by Birmingham City Council and forms the basis of the bid submitted by developers St Modwen.

Local Labour MP Richard Burden (Northfield) raised concerns about the consultation period with residents and warned the inquiry that the process could falter if locals were not better engaged in future discussions.

“People should have been given a say rather than the opportunity to respond to what the council was saying.

“I cannot recall any information being volunteered to local residents and at each stage anything that has happened has been a result of my initiative.”

Representatives of Birmingham City Council said independent consultants had been brought in to conduct forums and telephone surveys.

Residents were kept up to date with newsletters, while more detailed technical information was made available on websites.