One of Sheppey’s oldest eating places is being forced to move. The popular Klondyke Cafe, which has been on Rushenden’s Klondyke industrial estate for 40 years, is closing to make way for up to 1,000 new homes.

It was expected to stay until May but owner Fred Ford, 58, is shutting early after last week’s announcement of a £3.5 million government cash to boost the area’s regeneration plans.

He said: “Work on demolishing buildings to make the site ready has been brought forward because of the cash so I will be closing at the end of this month.”

His equipment will go into storage until he can move the cafe, which is in the last remaining offices of the old Sheppey glue works, to Stones Fisheries off the Halfway Road in Sheerness.

He is awaiting planning permission from Swale council.

He said: “It will be a shame to see the old cafe pulled down. It will be the end of an era.”

The businessman, who had his own unit on the estate carrying out MoTs, bought the cafe two years ago from Anna Spencer after being a customer himself for 22 years.

Meanwhile, news of the cash boost has infuriated campaigner Tim Bell from Minster who said the money should have been put towards building a marina.

He said: “It is outrageous that Homes England, the new owners of the site, are just paying lip service to what they call ‘marine activities’ according to MP Gordon Henderson when there was a perfectly good plan to build a marina in the original scheme.

“The Environment Agency has just spent £2.5 million installing new flood gates across the entrance to the creek. If both sets of cash had been combined, work could have started on a marina which would have brought more investment into the area."

The original scheme devised by him, civil engineer David Orpin and Peter MacDonald would have provided moorings for 200 boats, room for bars, cafes and restaurants and would have cost £5.5 million.

Mr Bell said: "Queenborough is a natural sweet spot. It is in just the right location for sailing to London, Holland and France and already has more than 1,500 boats berthing every year but without any facilities. The Harbour Trust has been awarded money to expand because of the demand."

His comments followed news that Medway has been celebrating one of its most successful years for marina traffic.

Mr Bell added: “Medway council has led the way in showing how to regenerate an area with a marina, quality flats, restaurants and a factory outlet centre. There was a scale model showing how a marina could have changed the face of Sheppey but it has just been forgotten. This is a wasted opportunity.”

Work has already begun building the first phase of 100 houses on the former industrial site which was home to glass and bottle works and a steel rolling mill.

Plans include a new school.

Cllr Mike Cosgrove, Swale's cabinet member for regeneration, said: “This is an important piece of the jigsaw for this regeneration scheme and will prepare the ground for much-needed homes.

“By working in partnership with Homes England and Kent County Council, we are helping to turn this former industrial land into something with the potential to be of real value to the Isle of Sheppey and will help strengthen its growing reputation as place in which to invest.”

MP Gordon Henderson said: "I want to see brownfield sites used for housing development rather than cement over more green spaces. This particular scheme has been on the table for years ago and part of the site is already being built on.

"However, development of the rest of the site stalled because the cost of mitigating the land made it unattractive to developers."

He added: "The scheme will also provide a new school and marine-related activities."