But as the credit crunch hits, with large-scale property projects like Lumiere and the Kissing Towers either being delayed or biting the dust, people across the region are tightening their belts and cutting costs wherever they can.

The climate would tend to suggest the city's businesses are feeling the pinch and, inevitably, questions are being asked as to whether they have the strength to survive the current economic slump.

Patrons of Leeds Chamber of Commerce, who discussed the impact of the credit crunch at the Chamber's headquarters on York Place, in Leeds, certainly think so.

The meeting, chaired by Yorkshire Evening Post Business Editor Nigel Scott, heard how diversity would bring light at the end of the tunnel – and, encouragingly, the crisis is also persuading more people in Leeds to start their own businesses.

Gary Lumby, head of retail and small business banking at Yorkshire Bank, and Chamber vice president, said: "We're fortunate that we've got a strong business support network in Leeds, which stands us in good stead to help people with businesses move forward.

"The businesses that are slowing down the most are those with discretionary spending, like the pub and restaurant industry.

"Those businesses have been hit by a decrease in discretionary spending and the smoking ban.

"Having said that, we're still having people coming up with their own ideas about starting their own businesses. I think if unemployment does start to take hold, we will see that coming to the fore."

Shirin Borrett, of Business Link Yorkshire, said the organisation had actually received more enquiries about new business start-ups following the onset of the credit crunch last year.

She said: "It's business as usual. Our advisors haven't seen any businesses coming in and saying they've got issues.

"On the start-up side, we're starting to see a few more enquiries. People are thinking 'I might lose my job', so therefore I'll consider setting up a business on my own. It might not come to anything but the opportunity's there."

Bridgewater Place looks set to continue as Leeds city centre's most high-profile building for some time yet, after developments like Lumiere were put on ice or scrapped.

But according to some of the city's top property experts, Leeds would have been "foolhardy" to go ahead with some of the extravagant projects, considering the slowdown in mortgages and investment.

John Flathers, head of commercial property at law firm Irwin Mitchell, said: "We have to try and differentiate between the property aspects and the day-to-day business which is still going on. High-profile projects like Lumiere were driven by lots of mortgages and lots of investment. Now the mortgages aren't quite available from the banks, it's slowed that industry down and I think there's basically a two-tier problem.

"You've got the day-to-day business and how that's going to be affected by consumer confidence on the one hand, and then you've got the property industry, which is on its knees because there's just no funding for the big projects to go ahead. I think Leeds would have almost looked foolhardy going ahead with some of the big projects, like Green Bank, in the current economic climate."

Gary Williamson, chief executive of Leeds Chamber of Commerce, expressed fears over "confusing" figures surrounding city centre living, which he says is continuing to boom, especially with the growth of developments like Clarence Dock.

He said: "One of the problems Leeds is facing is the statistic that 30 per cent of city centre flats are empty, which isn't true. I'm told it's 95% full and rental has increased over the past 12 months.

"But 30% has become common currency. That creates a negative impression in its own right."

The panel agreed more projects like the Leeds Arena are needed to put Leeds on the cultural map of Britain, a position which other northern cities like Liverpool have achieved through investment in entertainment and the arts.

The business leaders also expressed concerns that Yorkshire has no events in the 2012 Olympics, while the region is also unlikely to have any football grounds involved in a 2018 World Cup bid.

Bob Pritchard, senior associate at law firm Pinsent Masons, said: "Liverpool demonstrates quite well what can happen if you actually get behind a city and promote it. Liverpool's regeneration has taken off enormously, in the same economic climate, and it's a really bustling city. It can happen here with some of the enthusiasm that's in Liverpool at the moment."

Gary McCall, chairman of Leeds Media, added: "In the Olympic Games in 2012, there's not a single event taking place in Yorkshire.
"By 2018, almost certainly there won't be a single venue in Yorkshire that will be good enough to stage any of the football games.

Diversity

"So for a city like Leeds, which is described as the capital of Yorkshire, it would be nice to have some big-scale projects that would increase the profile of the city."

But despite Leeds's shortcomings on a cultural and entertainment level, the patrons agreed that the business industry was strong enough to work through the credit crunch – partly because of Yorkshire entrepreneurial spirit.

Gary Williamson added: "We're still a large manufacturing city. We have sports and hospitality. We have a very diverse city and that will help us ride through it.

"We can't fail. It's not an option. We have to pull through it."

John Flathers added: "Yorkshire entrepreneurial spirit counts for a lot and I think everybody is getting their heads down and trying to make sure their businesses continue as normal."

So, the businesses of Leeds have the strength and the diversity to survive the credit crunch – but when will it end?

Steven Newdall, managing partner of Levi Solicitors, said: "It will go on for as long as this present government is in power. I'm firmly of the view that we now have a weak leader and when you have weak leadership in any sphere, it's difficult to move things forward.

"He (Gordon Brown] is being attacked from all sides. He's presided over an economy as Chancellor which has basically gone belly up in six months."