Thanet council is to reject plans for a compulsory purchase order for Manston airport.

A report to the council's UKIP cabinet says the authority does not have sufficient assurances about the finances of its potential partner, RiverOak, an American investment company.

It says the lack of assurances would present too much of a risk to the council and taxpayers.

The news will come as a major disappointment to campaigners and could trigger a crisis for the Ukip-controlled council, which could see even more defections among its members.

It has been welcomed by the owners of the site - renamed Stone Hill Park - who said they plan to progress with plans to turn it into a manufacturing park supporting 4,000 jobs.

Negotiations over a possible compulsory purchase order (CPO) have been going on for several weeks but relations between the council and RiverOak have become increasingly strained.

"Legal advisers and officers are not satisfied at this moment in time that the information or assurances provided to date by RiverOak justify the council deciding to make a CPO..." - Council officers' report

A special cabinet meeting is to be held on Thursday when the report will be discussed by councillors.

It states that: "There is insufficient evidence available to the cabinet to be satisfied that a proposed CPO is likely to be successful which would justify its entering into an indemnity agreement."

It adds: "Given the above... legal advisers and officers are not satisfied at this moment in time that the information or assurances provided to date by RiverOak justify the council deciding to make a CPO or as part of that process to support the appointment of RiverOak as the council's indemnity partner in advance of deciding whether to make a CPO."

A key stumbling block is Thanet council's concern about whether RiverOak had the resources to fund not just the CPO process but the costs of acquiring the site.

The report says the CPO process meant it could take up to three years for RiverOak to secure funding.

South Thanet MP Craig Mackinlay said: "The report is frankly unbelievable as far as I'm concerned, I felt RiverOak had put enough on the table for the council to progress with a CPO.

"The Ukip Thanet council is unwilling to go further and it is now up to others, including myself, to look at other potential partners.

"The report is frankly unbelievable as far as I'm concerned, I felt RiverOak had put enough on the table for the council to progress with a CPO..." - Thanet South MP Craig Mackinlay

"I have been moderately quiet on this issue since the election letting the Ukip Thanet council find its feet but it appears it has been incapable of doing so.

"If the council is not willing to say yes to RiverOak perhaps other players will be acceptable. I still maintain that this is a profitable site and will have a sounder future with the reopening of the airport.

"Somebody has to look for other ways of opening airport. Thanet council has not been looking very hard and I was happy enough with RiverOak but it seems the council officers, Chris Wells and his team were not satisfied.

"I appreciate protecting taxpayers money but from what I saw a CPO with RiverOak would have been comfortable enough. I will do everything I can to be at the meeting on Thursday."

Stone Hill Park spokesman Ray Mallon said: "The proposal of a CPO has created great uncertainty over the site and this has had a detrimental effect upon the economy and social fabric of Thanet as a whole.

"A case in point, was the recent decision by TDC’s planning committee to refuse a 'change of use' planning application which would have resulted in 100 jobs being safeguarded, 80 of whom who live in Thanet," he added.

"We are now considering a number of options available to us in relation to the recent planning decision, but we will await the final outcome of the CPO executive decision making process, before determining our preferred course of action."

“In the near future, we will be announcing further detail with regard to our plans for Stone Hill Park, which we firmly believe are creative and spectacular.

“The plans are deliverable and we are very much looking forward to engaging the public, Thanet District Council and Kent County Council to make them a reality."