TRURO City Football Club chairman Kevin Heaney's company has closed its main office and lost a third of its workforce.

The Cornish Homes boss claimed the troubling times have come as a result of the credit crunch.

The firm this month closed its base at Newham, Truro, and moved all of its operations into its offices in Lemon Street. Staff there refused to comment.

But Mr Heaney admitted he has had to lay off 21 out of 31 permanent employees since January, not including job losses by contractors and sub contractors working on construction sites.

Building work on Cornish Homes developments at Boscawen Woods at Truro and Zen, Liskeard, has also stopped, according to Mr Heaney, also due to the crisis hitting mortgage lenders up and down the country.

Speaking to the West Briton from his holiday in Spain, he claimed that he was not aware of any of the companies under the Cornish Homes umbrella facing closure.

He added: “We all know the development world has been pretty tough at the moment and there have been a lot redundancies for the protection of the group.

“We're going through a process and I don't know where that is going to end up.

“It's a matter for me and there are issues and I'm not going to deny that.

“It's the same as any other developer.

“The banks have stopped lending money to developers and stopped lending money for mortgages. People can't buy homes so developers can't sell them and can't build them and it's a vicious circle caused by the banks in the UK.

“The knock-on effect is we have made people redundant, no different to any other prudent business.

“Cornish Homes is made up of a group of companies and one or two of the companies will have to shut down because they are not earning money.

“Decisions like that are not made lightly, but we are in a completely different climate and economy than we were a year ago.”

Mr Heaney pointed out thousands of jobs being shed by national home-builders like Persimmon Homes.

But he also admitted he is selling a home in Lemon Street, Truro, one of only three detached houses in the road, with a guide price of £795,000. He lives with his wife and two children in a nearby property which was bought for a similar price several years ago.

As previously reported, plans to make Truro City a full time professional side have been shelved, with Mr Heaney blaming the unstable economic times in his industry.

Mr Heaney dropped from number 458 to 550 on this year's Sunday Times Rich List. It gives his worth as £145 million, down from last year's estimate of £154 million.