THE empty Arcade site in Walthamstow is having a “terrible” effect in the community, according to Liberal Democrat leader Nick Clegg.

He also criticised the council for a lack of openness during the nine years the Hoe Street site has been empty.

A number of schemes to redevelop the site, which was cleared after the council purchased buildings on the site, have collapsed - much to the dismay of residents.

The council has now been forced to intervene and finance the scheme after developer St Modwen decided not to invest in a plan to build a tower, a cinema, a shopping centre and new homes.

Liberal Democrat members of the leading coalition voted against the £36million public bail-out, which has run into problems after it emerged the proposal would break EU rules.

During a visit to Walthamstow on Friday, Mr Clegg said: ““[The Arcade site] has been this great gaping hole in the middle of the community for such a long time.”

“This is made worse by the fact that there’s been such a lack of transparency about what decisions have been taken.”

He added that there was a risk the council could “panic” and rush to bring forward new plans for the site, causing further problems.

“It would be raising people’s hopes only to have them dashed,” Mr Clegg said.

“I think the best thing would be to find some communal use for that space on a temporary basis so that a proper sustainable solution can be reached.”

Mr Clegg also said he would welcome the adjacent EMD cinema being reopened as a cinema.

“Like everybody here, I think it had great nostalgic value,” he said.