A Scheme to revive a declining Sussex resort town is on the rocks after it emerged the project is illegal.

World-renowned architect Sir Norman Foster designed a fabulous glass crescent containing flats, an hotel, a visitor centre, restaurants and shops for the seafront at Hastings.

But a covenant dating back 111 years dictates the site opposite Pelham Place must be kept in trust "for the common use, benefit and enjoyment of Her Majesty's subjects and the public for ever".

The 1893 Conveyance of Foreshore was drawn up after a High Court battle between the council and the Crown over the ownership of the land, given to the people of Hastings by royal charter at the time of Queen Elizabeth I.

It governs how it is used and technically prevents its sale.

Hastings Borough Council and the South-East England Development Agency (Seeda) have already spent about £1 million on architects' and consultants' fees for the strategy, which is the centrepiece of a £38 million Government-backed regeneration project.

Officers are now trying to find a way through the legal minefield to bypass the terms of the covenant.

One proposal involves offloading the prime site to a charitable trust and then exploiting Seeda's powers to make a compulsory purchase order buying the land at a figure agreed by an independent valuation. It would delay the start of building for at least two years.

An Act of Parliament to repeal the terms of the covenant would also be a lengthy process.

The matter was made an urgent additional item at a meeting of the council's ruling cabinet on Tuesday.

A report from chief executive Roy Mawford revealed the authority had been technically in breach of the covenant for more than 100 years.

A spokesman said:"By charter, Queen Elizabeth I gave certain favours to the people of Hastings, including the ownership of the 'stonebeach', the area we now call the foreshore.

"A dispute arose between the Crown and the then Hastings Corporation in the 1890s which ended in High Court litigation.

"This was settled by the corporation accepting the Crown was the owner of the land, and the Crown then agreeing to sell the land for £400 in September 1893 subject to certain restrictive covenants.

"The terms of the conveyance were that the land was subject to a charitable trust.

"It is a legal requirement that a trustee keeps a separate account of income and expenditure and that charitable trusts are registered with the Charity Commission. Neither has been done."

Hastings Council leader Jeremy Birch said 111-year-old conditions "should not stop progress in Hastings".

He added: "It is important we get it right so we can attract investment."