THE year-long uncertainty over Oriental City ended this week with an agreement in which the development of the site will go ahead, but tenants will be compensated with an undisclosed sum and 11 months' free rent.

Tenants of the the Far Eastern shopping and restaurant complex in Edgware Road, Colindale, have agreed on a "comprehensive package of measures" with Development Securities, the company set to rebuild the site.

Tenants will trade rent free from now until the end of May 2008, when the centre will close in preparation for the £200million development.

In exchange, the Oriental City Tentants' Association (OCTA) has agreed not to pursue a legal challenge to the scheme, which includes more than 500 flats, a primary school and a DIY superstore, in addition to 300,000 sq feet of shops and cafes. The association had previously claimed that it would "rip the heart out of the real China Town".

At a press conference on Tuesday attended by supporters of the complex, including footballer Ian Wright, joint managing director of Development Securities Julian Barwick said: "Parallel to these discussions OCTA has decided not to seek a judicial review of Brent Council's decision to approve the development. We wish all the traders continued success. We feel sure that our development will lead to a first class regeneration of the Colindale area - and indeed for the whole of the Brent and Barnet communities."

It was not revealed whether the agreed lump sum would be shared out between the tenants or used to relocate them as a group.

Development Securities has also agreed to put £250,000 towards a temporary community space on another site while work goes on. The planning application already stipulates that space is provided for the oriental community to return as a permanent part of the new development.

This provision was referred to by chairman of the Oriental City Tenants' Association, Yip Fai Liu, as "the new Oriental City", saying it would "live on as a cultural and commercial hub".

He said: "I never thought when we started this campaign that today I would make a speech saying we should forget everything. We are pleased to have reached an agreement with Development Securities. They have negotiated with us in a very gentle manner."

However, Mr Liu also said that as his campaign had accelerated, business at the complex had slowed. He said: "We want to make it clear to all our loyal customers that it is still very much business as usual at Oriental City for many months to come."

The complex contains Malaysian, Korean and Japanese as well as Chinese shops and restaurants.

Martin Spanswick, lease owner of Japan Lifestyle, which sells an assortment of Japanses products, said: "I think agreement could have been reached a lot sooner, six months ago at least, had everyone been sensible about it. The way it was entered into by the plc company was very unfair to the tenants. But now I think we have come to an amicable agreement."

In March Ken Livingstone confirmed he would not stand in the way of the rebuilding, saying he did not have the legal powers to do so.

Marlene Toh Emerson, communications director of the Chinese Liberal Democrats, said: "This is a landmark settlement for the Chinese community. It shows that when we get together we can have a voice and have our needs met. At one point the two sides seemed miles apart."