A planned multi-million dollar redevelopment of Hamilton's waterfront is now on hold, according to Mayor Charles Gosling.

He said poor business, combined with the threat of losing docks revenues, has left the City of Hamilton in its worst financial state in two decades.

City treasurer Gary Edwards has predicted the organisation will see a $2 million shortfall by the year's end.

Said Mr. Gosling: "It's the first time in 20 years where there's been any drop-off of this size, and a consistent drop-off over an entire year.

"With our 2011 budget starting in two months, we have no idea what we have as a revenue source. But the various officers within the administration are trying to come up with ways to compensate for losing one-third of our income."

He added that the City's revenues from wharfage fell nearly $1 million from last year to $4.56 million.

And parking fell from $3.2 million to $2.95, in part because "a huge amount from unpaid parking tickets is still being written off".

Mr. Edwards said: "Our revenue bases had crept up over five years. I think the shortfall at the end of this year will be $2 million in total."

The Corporation of Hamilton revealed a $639 million plan for the waterfront in 2006. The proposed revamp would have relocated the docks and created new land for a hotel, offices and luxury housing.

That plan was massively scaled down this year.

It was announced at a public meeting in June that the new "preferred concept plan" would cost between $150 to $160 million and would revolve around a "small village" next to the water.

Mr. Gosling said those plans have now been stalled as have smaller projects including:

l joint work with Government on facilities for new X-ray scanning equipment at the docks;

l improved street lighting and lighting for car parks;

• refurbishment of the City's aging traffic light system.

Concerns over loss of wharfage and ports revenue from the Municipalities Reform Act had left a "giant question mark hanging over Hamilton and St. George's", the Mayor added.

But, he said that the City had begun to engage Government on "serious discussions to seek a resolution".

He said that talks with then-Minister of Finance Paula Cox three weeks ago, followed by meetings with financial secretary Donald Scott, had proceeded favourably.

"In this short period of time we received more of Government's attention and cooperation than in the prior 18 months," he said.

"With Minister [Derrick] Burgess appointed as the Minister overseeing municipalities, we need to discuss the changes within the Act and find our common ground. Investors and people in general like to be assured that there's stability."