Investment in the Ta' Qali crafts village was one way of increasing jobs especially when unemployment was rising, Labour leader Joseph Muscat has said.

Speaking during a visit, Dr Muscat said the government's decision to scrap plans for an overhaul of the village was a bolt out of the blue for the tenants who believed the project would be completed.

The crafts village project had been promised by the Nationalist government for the past 17 years, he said.

The unfulfilled promises dated back to 1992, when the plan to rehabilitate the area was announced. The subject was broached by the Nationalist government at least once a year between 2000 and 2009 but it never materialised, Dr Muscat said.

The Maltese lost out as a consequence of Prime Minister Lawrence Gonzi's broken promises, when people still believed in their crafts.

However, the Finance Ministry reiterated yesterday that the tenants would not be forced to abandon Ta' Qali to move to Dock No. 1.

Over the past weeks, the area had been cleaned and regular meetings between the tenants and officials from the Malta Industrial Parks held to discuss the village's future, the ministry said.

In January, the government announced that the long-awaited overhaul was off the cards because there were no available EU funds.

The rehabilitation project had been re-launched in November 2007 when the government issued a call for tenders for the €28 million project that was meant to start last year and take four years to complete.

Instead, the government is now planning to transform the Dock No. 1 area in Cospicua into an Arts and Crafts Centre.

Dr Muscat said the tenants were told that the shift to Dock No. 1 had also been shelved that there were other plans for the area.

"I hope this project will be completed - there are people who are willing to work but who are held back by the government's red tape and broken promises," he said.

At the moment, there are about 35 businesses with a total of 100 employees at the crafts village.