Bosses behind MDM Homes Ltd's proposal for 141 riverside apartments on Lock Lane say that because Paloma Ltd – which owns the site – still hold its chemical licence all plans for nearby development face health and safety red tape.
The licence creates a restricted zone around the former factory.


Paloma Ltd, which bought the sprawling plant from C6 Solutions in 2005, is working on a masterplan to redevelop the 100-acre site.
Michael Michaelson, chief executive of MDM Homes, said: "It's completely frustrating that the regeneration of this side of Castleford is being held up.
"Until the licence is rescinded there will be no regeneration in the town.


"We've met with health and safety officers and would like to work with Paloma. But at the moment there's nothing anyone can do as their hands are tied."
If approved, MDM Homes' apartments – with cafés and 70 parking spaces – would overlook the River Aire.
Project manager Antony Georgallis said the part eight-storey part five-storey building was likely to be rejected on the grounds of health and safety.


He added: "As soon as an application for the Hicksons site is submitted then regeneration potential nearby will be unlocked.
"Obviously if the factory was going to make chemicals again then there is a duty of care to stop development.
"But everyone is frustrated because regeneration there will bring investment, infastructure, new housing facilities and more people."


Stephen Roberts, senior director at CB Richard Ellis – project manager for Paloma Ltd's scheme – said extensive studies into site contamination had been carried out and council officers had given guidance.
He added: "Hazardous materials remain on site in areas clearly shown and marked with no entry.


"The licence remains in force as a legacy of past activities at the chemical works and because of hazardous material held or stored on site.
"It satisfies the Health and Safety Executive that carefully controlled demolition is being undertaken in a proper and safe fashion by contractor Encia Ltd, which also maintains 24-hour security.
"Paloma is aware of the effect of restrictions imposed by this licence and it is for this reason that we are working towards submitting a planning application this year for the site's redevelopment.


"The company will need to consult fully with the community about what would be a suitable development. Without pre-judging the responses to public consultation, residential development would appear logical."
Mr Roberts also said firm Arch Chemicals remained in use on the site and Paloma Ltd was hoping to meet with bosses at MDM Homes.


Wakefield Council's service director for planning, said MDM Homes Ltd's submitted application was in the restricted zone.
He added: "Council officers are in discussions with owners of the site to bring forward development in that area."
A date for MDM Homes Ltd's application to be decided has not yet been set.