COUNCIL bosses poised to collect a �1.5m windfall from developers in the wake of a collapsed deal for a controversially axed health centre insist they will ask local people how to spend the cash.

Reading Borough Council had earmarked the Section 106 money for a clinic at the West Village alongside Tesco Extra in Oxford Road - on the old Battle Hospital site - where 435 flats and houses are being built.

The deal signed in 2006 required that, once the 130th private house was sold, the developer (now David Wilson Homes but originally Barratt Homes) would create a building for Berkshire NHS Primary Care Trust (PCT).

But the scheme fell through in December 2011, when the PCT ruled the huge investment would hit frontline services elsewhere and claimed the Reading Walk-In Centre in Broad Street Mall could fulfil the role.

Council spokesman Oscar Mortali said the cash will be used for "community related benefits" and added: "The trigger for the payment has now been reached and we are in contact with the developer regarding the exact amount due. Once those discussions have taken place we intend to talk to the community again about what type of community benefit the funding could provide."

Battle ward councillor Chris Maskell, who originally branded the PCT's decision a "betrayal" of the community said: "We need to listen to people's views. It's a large sum of money and we can do a lot of good with it and we need to look long and hard about what we do with it."

West Reading Residents Association chairwoman Natasha O'Brien wants the area's healthcare services improved and said: "We are very happy that they are going to speak to us but we would like to know when and how. Local GP practices need help to improve their premises to enable them to keep up with the added pressure as people move into the new housing."

PCT spokeswoman Jane Fannon said talks are under way with the council and the North and West Reading Clinical Commissioning Group (CCG) and added: "We will continue to work with local authority partners, the developer and local communities to understand how these funds will be most appropriately used to support healthcare services in the area."

Reading West MP Alok Sharma has written to all parties and said: "I am seeking concrete assurances on this matter from the council and local health commissioners."