Negotiations between Stagecoach and Stockport council over the town's bus depot appear to have all but broken down.

The town hall has now decided to push forward with a plan to use Compulsory Purchase Order (CPO) powers – usually used to buy land or property without the owner's consent when it is needed for the public good – to bring the long-running saga to an end.

The council owns the Daw Bank plot, which is split across two blocks. Stagecoach has a lease that runs until 2046. The council wants to bulldoze the depot for a major development.

Bosses have accused Stagecoach of holding up the plans to revive a huge chunk of the town centre – and risking the loss of more than £40m in funding for the project – by asking for too much money to surrender its lease.

There are plans for Stagecoach to move into temporary bases elsewhere in the borough, as well as for a new permanent depot, but talks continue to stall on the firm moving out of the Daw Bank site.

Council bosses are now pushing ahead with a CPO as a backup measure. Usually, a town hall would use a CPO to buy a site from its owner without its permission. Any leaseholder could then be forced to move out.

In this case, the town hall already owns the site. CPO powers could be used differently to secure 'vacant possession'.

Essentially, the town hall would use the legal mechanism to kick occupier Stagecoach out if an agreement can't be reached.

The council wants the plot for phases one and three of the the £350m Stockport 8 development, one of the largest regeneration projects in the country. There are plans for 1,300 new homes and massive sites for businesses. Phase one will include more than 500 homes.

The area west of Stockport's iconic viaduct – between the now-finished Weir Mill plot and the train station – will be transformed.

It was hoped construction would start this year, but there have been delays as talks over the Daw Bank site rumble on.

The scheme is being delivered by the English Cities Fund, a joint venture made up of Homes England, Legal & General and Muse. Last November, £41.3m of Greater Manchester Combined Authority (GMCA) funding was secured for the scheme, part of wider town centre development blueprints.

The town hall says the company is 'demanding a financial payment… in excess of the sum to which the council's advisers consider it is entitled' amid 'sustained efforts over a prolonged period of time'.

Neither the amount offered nor the sum Stagecoach wants have been revealed publicly.

There are fears at the town hall that if the stand-off continues, the GMCA funding could be lost, while the 'delivery of a major regeneration project for Stockport' stalls.

Discussion on the issue at the council's latest cabinet meeting on Tuesday (September 15) was in private – without the public and members of the press – as the specifics of the negotiations are deemed commercially sensitive. Council bosses agreed to push on with a CPO.

Stagecoach will have the option to challenge the validity of the order at the High Court.

Council leader Mark Roberts said: "CPO powers are not powers we often exert as a cabinet. But we do use them where we feel we need to."

There are plans to relocate Stagecoach to two temporary depots off Heaton Lane and Kingston Street while a new base – which will be owned by Transport for Greater Manchester – is built in Cheadle Heath. But those proposals can't progress until the Daw Bank issue is resolved.

Councillor Micheala Meikle, cabinet member for economy, regeneration and skills, previously said: "Our focus remains on reaching a negotiated outcome with the leaseholder, while protecting the delivery of a project that will bring new homes, jobs, investment and long-term benefits for Stockport and its people.

"However, a scheme of this scale and importance cannot be left open to unnecessary delay. Seeking approval to prepare for the possible use of compulsory purchase powers ensures the council has the appropriate tools available, if they are ultimately needed, to keep this major regeneration project moving to schedule."

A Stagecoach spokesperson said previously: "We remain engaged in ongoing, positive discussions with Stockport Metropolitan Borough Council regarding the voluntary surrender of an element of our lease in advance of its expiry in 2046.

"Both parties continue to work collaboratively to support local regeneration goals while ensuring the uninterrupted delivery of local bus services."