The council has been told to present a fresh business case and traffic modelling ahead of a crunch meeting of the LEP board in November, when members will make a final decision on whether to claw back the grant it awarded the project in 2015.

It comes after a meeting earlier this month when the board indicated by four votes to three that the funds should be pulled as a result of repeated delays to the scheme – but the vote was not binding as there were not enough members present.

Instead, all members were asked to vote in writing following the meeting, and the LEP has now revealed they have held back from demanding the funds be returned immediately.

The grant was awarded specifically towards the 1.14km Oxon Link Road (OLR), stretching from Churncote Island to Holyhead Road, but the whole relief road has since been brought under a single planning application which has prompted thousands of objections and been plagued by setbacks.

The LEP said the new business plan should include updated traffic modelling and analysis showing that there is still a need for a road and that it offers value for money.

This information must be produced by the end of October, by which time the council also expects a decision on the planning application to have been made.

LEP chair Sonia Roberts MBE said the board wanted Shropshire Council to demonstrate that there was still a strong business case for the money to be invested in the OLR.

She said: “The board will consider this new information and the outcome of the planning decision at its meeting in November and make a final decision about whether to continue to support the OLR project.

“We feel we have been very patient with the council having first awarded this funding eight and a half years ago.

“The Marches LEP has a mandate from government to ensure the best use of public money and is accountable for the appropriate management and oversight of all funding we allocate.

“The board has agreed that in this case the council must provide the evidence that this funding still represents an appropriate use of public money and must also make progress on planning.”

The money came from the first round of the Government’s Local Growth Fund, from which the LEP secured £75.3m in 2014.

At the meeting on August 3, some members said they felt a “responsibility” to redistribute it to more deliverable projects, given the repeated delays.

The scheme was expected to go before Shropshire Council’s northern planning committee for a decision last month, but was set back again after the Environment Agency said it still had concerns.

The council has told the board it is confident the application will now be decided in the autumn.

LEP chief executive Rachel Laver said: “This is a significant amount of public money and it is the LEP’s duty to ensure it is used appropriately.

“We are aware that there are significant other issues which affect this project and this decision seeks to give the council time to address some of those concerns.

“Members will decide in November what is the most appropriate course of action once we have received the updated information we require from Shropshire Council.

“We continue to have an excellent working relationship with the council.”