Business and community leaders in Bradford were stunned today to discover Yorkshire Forward has snapped up the derelict Odeon site for about £2 million.

The regeneration agency says it has bought the key city centre site to help the rebirth of the city - but none of Bradford's key players seems to have known about it.

The Government-funded body stepped in to buy the site just hours before it was due to be auctioned in London.

The agency - previously criticised for failing to help fund the planned £200 million Broadway shopping centre in the city - said it had acquired the site to help with a master plan for the rebirth of the city. The sale of the 73-year-old building on a prime city centre site comes as a new Urban Regeneration Company looks to bring new life to Bradford.

The URC, a joint venture between Yorkshire Forward and Bradford Council, has commissioned internationally-acclaimed architects Alsop to prepare a master plan to direct the city's future development.

News of the sale of the Odeon, thought to be for £2 million, amazed councillors, business leaders and MPs.

But they welcomed it as a major step towards bringing new life to the city.

A spokesman for Yorkshire Forward said: "It is a strategic acquisition in advance of the master plan. It is a prime part of the city and we have secured it for future development."

Bradford Council leader Councillor Margaret Eaton and leader of the Labour group Councillor Ian Greenwood, both members of the URC board, welcomed the move but said they had been unaware of it.

Bradford North MP Terry Rooney said: "It is the first time they have done anything for Bradford. It is welcome that they are taking such an interest and I hope they get it redeveloped."

Previous owners Grange Estates obtained planning permission to demolish the building and replace it with a contemporary leisure complex which would have included an 86-bedroom hotel, casino and bars.

But they decided to abandon the plan because of the economic climate.

The massive building was due to be auctioned at the five-star Radison SAS Hotel in Central London by international auctioneers Colliers CRE yesterday.

Bradford Council's executive member for regeneration Councillor Simon Cooke said he would talk to Yorkshire Forward about their plans.

And Coun Eaton said: "We look forward to talks with them about the purchase. We hope they will be as generous in their support of other city centre projects."