A housebuilding company is to be given £3million of Glasgow council cash after running out of money for a part of the East End regeneration.

A housebuilding company is to be given £3million of Glasgow council cash after running out of money for a part of the East End regeneration.

Gladedale Homes, formerly Bett Homes, won a massive contract in 2004 to build more than 1200 homes in the Oatlands area.

Part of the agreement was the company would carry out realignment of Rutherglen Road as part of the East End Regeneration Route.

However, with only part of the work done, Gladedale has told Glasgow City Council new house building has "virtually ceased" due to the credit crunch.

The firm says it is not generating enough income to allow it to carry out the road work.

Clyde Gateway, the regeneration agency responsible for the East End, has agreed to provide the council with £3million.

That will be passed on to Gladedale, who will repay the cash once the housing market picks up.

The council will effectively repay Clyde Gateway by agreeing to fund its projects to the same amount over the next two years.

The move is expected to be approved at a meeting this week of the executive committee.

City council leader Steven Purcell said: "The financial crisis is having a huge effect on the construction industry and it is important we support the sector in Glasgow.

"We have to be prepared to relax rules and show more flexibility to promote development, safeguard business and protect jobs, skills and our regeneration goals.

"The proposal we are making for Oatlands should ease pressure on Gladedale at a crucial time and ensure there is no hold-up in the delivery of the East End Regeneration Route, M74 completion or the 2014 Commonwealth Games venues."

Clyde Gateway chief executive Ian Manson said: "The East End Regeneration Route is hugely important, linking to the extended M74 and existing M8 and unlocking development sites throughout the Clyde Gateway area, particularly in Shawfield and Dalmarnock."

A Gladedale spokesman said: "This agreement will enable the road to be completed now and for Gladedale's funding to kick in when sales and the economy improve."