Sir Tom's fury over Butterfly land wrangle

And the Hibs owner called for an official inquiry into the 12 million deal as it emerged the Lochend Butterfly site was set to become the centre of a legal wrangle.

The land, which the football club wanted to develop to help secure its future at the Leith stadium, was sold by the council to a joint venture firm three years ago. But today it emerged that the main developer is no longer part of the deal and is considering legal action against its former partners.

Sir Tom said he found it "very strange indeed" that Morrison Developments was no longer involved in the deal, and the change meant the deal should be cancelled, with the land being put up for sale again.

He said: "I’ve made a number of inquiries with the council over this site in the last year when I felt there was nothing happening. I’ve repeatedly been assured there was no problem and that the deal with Morrison was still on. I’m very surprised to hear they’re no longer involved.

"The council agreed the deal with Morrison as far as I’m concerned. If they’re saying they’re not part of this joint venture company then the site should be put up for sale again."

Sir Tom last week renewed his interest in the site three years after a Hibs-led consortium was outbid by the joint venture company.

Council leader Donald Anderson has threatened to pull the plug on the deal because of the amount of time it is taking to resolve protracted wrangling. Hibs initially unveiled plans to build homes and offices on the land to the east of the stadium, to fund a 4-5m redevelopment of its East Stand.

Sir Tom - who has claimed the council had been biased against his bid for the site - has suggested that if the club could still buy the land, it would greatly increase Hibs’ chances of ditching a mooted relocation to a shared stadium with Hearts at Straiton.

The council said the consortium behind the winning bid was "headed" by Morrison Developments when it announced it was selling the land to the joint venture firm three years ago.

But a spokesman for the Anglian Water Group, which has taken over Morrison Developments, said: "We’re no longer participating in the joint venture company Lochend Butterfly Project Ltd. This was not through our choice and this is a matter we are currently taking legal advice over."

The main player in the scheme to build 380 new homes on the 12-acre site is now the Abercastle Property Group, fronted by businessman Alastair Cunningham.

A Morrison insider claimed: "It was Morrison’s involvement in this project that gave it credibility with the council. It was pretty much a 50/50 deal between the two companies but there was no contract ever signed. It was more of a gentleman’s agreement to jointly bid for the site."

Mr Cunningham said he was "very surprised" to hear the firm was taking legal advice, claiming the split had been "amicable". He insisted that it would be impossible for the council to pull out of the deal now.

"We’ve a legally binding contract with the council. I believe we’ve acted honourably and promptly in all our dealings on this," he said.

Morrison had gone off the deal after finding it was going to spend hundreds of thousands of pounds paying for preparatory work over the site, he claimed. The council is unable to get its 12m until planning permission is gained for the site, but an application was only lodged in June of this year.

A council spokeswoman today suggested a deal was still likely to go ahead with Mr Cunningham’s firm.

She said: "In accordance with its decision regarding offers for the sale of the Lochend Butterfly site, the council entered into negotiation and subsequently concluded missives with the Lochend Butterfly Project Ltd, which is an independent legal entity.

"Our contractual arrangements are with this company and not with any of the parties involved in a consortium."