COUNCIL chiefs have decided to hold on to a Southampton business park rather than cash in on the premises for £2.5m.

It means Solent Business Centre-based in Millbrook, will continue to operate as usual for the next three years.

A new lease will be signed with the current tenant, Southampton Enterprise Centre, to continue managing the 98-unit centre The centre, which provides cheap office space for start-up companies, is home to 87 businesses employing around 110 people.

The man in charge of the city's economic development decided he would keep the £217,000 revenue the centre brings in each year.

Councillor Royston Smith, said: "It underlines the commitment to economic development in the city and support for businesses both small, medium and large as a vehicle for prosperity."

Cllr Smith rejected an accusation from Liberal Democrats he had U-turned on earlier Tory budget plans to sell off the centre, saying occupancy levels and revenue had improved in the past 12 or 18 months.

"It's being pragmatic," he said. A council report warned the closure of the SBC would have a severe effect on the current tenants and the sustainability of businesses located there as there was insufficient "easy in easy out" premises elsewhere to accommodate their needs.

The start-up units at the centre are up to three times cheaper than in other areas.

Cllr Smith decided not to hand the management of the centre to Capita as part of a £290m deal that will see key council services outsourced to the professional services giant.