The developers of Scarborough's contentious twin towers hotel and apartment development have met with the West Australian Government and officially advised that the project is on hold.

Key points: Developer 3 Oceans said it would be exploring options with a new design team

Developer 3 Oceans said it would be exploring options with a new design team The twin-tower proposal has split opinion in the Scarborough community

The twin-tower proposal has split opinion in the Scarborough community The WA Government said it would push to see a new development

The proposal for the north-east corner of Scarborough Beach Road and West Coast Highway had been set to feature towers of 43 storeys and 33 storeys.

In a statement released late on Thursday morning, a spokesman for developer 3 Oceans said he was disappointed to confirm the project was on hold.

He said a comprehensive review of the project had determined it was not financially viable in the current market.

In a statement given to ABC Radio Perth, Planning Minister Rita Saffioti said she was told 3 Oceans would now be exploring other options and engaging a new design team.

"While the advice is disappointing, the State Government remains keen to see the development of a well designed building that reflects the significance of the site," she said.

"The MRA [Metropolitan Redevelopment Authority] will continue to work with all of the proponents in the area to facilitate new developments."

The 3 Oceans spokesman said the company remained committed to delivering a high-quality development that would benefit the community.

"The 3 Oceans board of management believes that a redesign of the project will result in a more feasible development that better responds to the market and considers the feedback provided by the community," he said.

"In considering options to progress the project, 3 Oceans is assessing interest from potential joint venture partners."

A controversial development

In December 2017 the MRA rejected a proposed $400 million plan put forward by 3 Oceans — which included two towers of 43 storeys and 35 storeys — over concerns it was a significant overdevelopment of the site.

The rejection followed a high-profile campaign against the proposal from local residents, alongside lobbying from struggling local businesses for the project to go ahead.

The proposal was set to include 100 public parking bays and retail and food outlets. ( Submitted: 3 Oceans )

But in June 2018 it accepted the latest proposal for the site which was revised to feature fewer apartments and hotel rooms but was in fact taller than the original proposal.

That proposal, which is now on hold, was also set to include 100 public parking bays, an observation deck with an art gallery and restaurant/café, and retail and food outlets covering almost 3,000 square metres.

Locals kept in the dark: MP

The Member for Scarborough and Shadow Planning Minister, Liza Harvey, told ABC Radio Perth the future of the project was an important issue for local residents and they deserved more of an explanation.

"I think it's bizarre that neither the MRA nor the Minister will come out and talk about what's happening on the site, it is an iconic site and it's now a sandpit," she said.

"People deserve an explanation quite frankly and I don't know what this secrecy is about."

From the beginning, the project was met with strong reactions from both those who supported it and those who saw it as an overdevelopment.

The initial proposal included 346 apartments and 158 hotel rooms. ( Supplied: Hillam Architects )

Scarborough Beach Association chairman Wayne Bowen said there would be a mix of reactions to the news that the project was going on hold.

But he told ABC Radio Perth the last thing people on either side of the argument wanted to see was the site sit vacant any longer.

"The last thing we want is just to have a fence around a sand pit that looks ugly, is not doing anyone any good and just turns a bad situation into something worse," he said.

"One of the biggest things in Scarborough currently is we are desperate for car parking spaces, we've got a 5,000-square-metre lot there now that's going to be vacant for who knows how long.

"Why couldn't that be turned into some sort of temporary car parking facility, as well as activated for community events and so forth?"

The 3 Oceans spokesman said the company was looking at options for a "temporary activation of the site" with the City of Stirling and the MRA

Falling apartment demand to blame: Premier

Premier Mark McGowan said he was disappointed the project had been put on hold and told ABC Radio Perth he believed the decision was due to falling demand for apartments.

"This is a matter for the developer and they make decisions based upon the market and their assessment of profitability and take-up at any given time," he said.

"But as I said we will go back to the drawing boards with them and see what other projects we can get up with them.

"Obviously, we've got a lot of housing out there around Western Australia that's available, so they're just trying to fit in with the market.

"We can't control what happens inside the company itself, what we can do is make sure that we have good approval processes and an encouraging investment environment."

The Scarborough Beach foreshore has undergone significant redevelopment with a new pool and skate park. ( ABC News: Eliza Borrello )

Mr McGowan said he had liked 3 Oceans' proposal and he would support another high-density project on the site.

"You've got to remember that the Government has invested around $100 million in infrastructure there at the Scarborough foreshore, with the swimming pool and the redevelopment, the skate park and all of those things, and you want lots of people to use it," he said.

"Having greater density in an apartment complex like that, you have more people, more life, more vitality, you have the businesses with people in there, buying coffees, buying meals, you have activity and life, which is exactly what precincts like Scarborough need.

"It's an easy political thing for people to do to say, 'We don't want high-rise, we don't want this or that,' but I do support that sort of development, because for some people, particularly those who are retired, that's what they want."