A company which wants to provide a multi-screen cinema for Witney says the project is still viable and will not be a drain on public money.

The Wychwood Regeneration Company plc, based in west Oxfordshire, submitted a planning application to redevelop the town's former football club land at Marriotts Close a year ago.

But it will now have to join a bidding contest with other developers following the district council's decision to look for a mixed use of the site.

Peter Earl, the company's managing director, said: "The fact that a locally based group is pursuing the development does not make us foolish dreamers. Our team includes some pretty hard-nosed architects, financiers and developers."

Doubts about the financial viability of a multi-screen cinema in the town have been voiced by the council's finance director Vic Allison, who said there might need to be some public subsidy to run it.

However, Mr Earl said they had carried out costings and believed the cinema was viable.

He said: "Not a penny would be knocked off the development for the site, and the operator would not need an annual grant or reduced rent."

The company has already made a formal offer of £5m to buy the six acre site.

Its planning application, which the council left undetermined while it carried out consultation on the site, was for a six screen cinema, 150 houses and flats, and a range of shops, offices and restaurants.

The council has now invited developers to submit schemes for Marriotts Close.

Council leader Barry Norton said: "There is no fixed valuation on the site, but if you consider what land values are at the moment £5m may be a bit on the light side.

"We are duty bound to get the best price."