It has been seven years in the making, but news of a £8.5 million injection for Walsall Waterfront has signalled the start of the long-awaited scheme.

At the much-trumpeted announcement of the project in 2002, regeneration chiefs had no idea the recession was about to hit.

The housing crisis was nowhere to be seen and construction companies appeared to be booming.

But in the last two years, a big question mark has loomed over the viability of the scheme as investors pulled out, jobs were lost and developers’ confidence disappeared.

Now it appears the giant scheme has been given a new lease of life after yesterday’s news of a cash windfall through the Government’s Kickstart programme to allow the Waterfront South scheme to begin.

Chief executive of Walsall Regeneration Company Dr Peter Cromar said today: “This is the confidence boost we needed.

“No-one wanted to be the first to take the plunge, now this funding will enable Jessup to go ahead with their work and when other investors see the work going on they will be encouraged to get on board as well.

“It has been a long road, it was first mooted around 2002 when no one could forsee what was ahead but hopefully this is now the start of things to come.”

The Waterfront project is made up of three schemes – Waterfront North, Waterfront South and Waterfront Lex. It is hoped the Waterfront North scheme will be next in line to start. Planning approval for £65 million Waterfront North scheme was granted in November 2006.

The proposals are for seven new buildings, which will feature iconic oyster-shape buildings – two tall structures that will face each other creating a walkway along the canal. Hundreds of new homes will be created, along with new offices, ground floor retail and leisure space, two new public spaces and, potentially, a hotel.

Parking will be provided for 630 cars. The final piece in the jigsaw is the Lex site. The 2.1 acre site lies at the western end of the northern section of Waterfront and on completion will act as a gateway to the town centre when arriving from Junction 10 of the M6 less than one mile to the west. An international competition promoted by developer Urban Splash attracted a world class field with 132 architects putting forward their ideas for an iconic building.

The winning design was from Vienna based firm Moh architects who came up with a W-shaped building to include a top class hotel, theatre, shops, offices and waterside cafes, visible from the M6.

It was thought a 120-bed hotel would kickstart building work the Waterfront scheme earlier this year. But Whitbread pulled out at the last minute announcing in May it was putting its plans for the seven-storey Premier Inn and Table Table restaurant on hold. It has not ruled out coming back to the scheme when the economic climate improves.