As the party prepares to formally take control of the town hall from Wednesday, they are attempting to draw a line under the controversy that has split public opinion in the city. Paul Scriven said one of his first jobs as local leader was inviting St Luke's to "clear the air" talks and to help look for a location that does not involve the Norton Nurseries site.

Trustees of the hospice responded by "noting" the invitation – and continuing to insist that Norton Nurseries is the best alternative to the existing premises in Little Common Lane in Whirlow. There appears to be no indication that they are giving up on the nurseries.

St Luke's says the land next to Graves Park would be ideal for a "world class" development to replace out-of-date facilities. Objectors maintain no development should be allowed on land bequeathed to the city as a public parkland.

Trustees of the Graves Park charity are the council.

Critics of the Norton Nurseries scheme have suggested the old Norton aerodrome but this has been ruled out as too remote and expensive by St Luke's and the landowners, Government regeneration agency English Partnerships, are not pursuing the option.

No potential locations are being floated by the Lib Dems at this stage, with the emphasis on a blank canvas. But Coun Scriven said it was obvious that there remains strong opposition to Norton Nurseries. "My party made it clear at the local elections that we support that opposition, as we believe in protecting our local parks.

"However, we also support the first class service that St Luke's provide to the people of Sheffield and we want to see St Luke's develop and flourish."

"Therefore within two weeks of becoming leader of the council I will invite St Luke's to join me in a high level discussion both to clear the air and to find a way forward that does not involve the Norton Nurseries site. I hope that St Luke's will accept this invitation."

Hospice trustees are standing by Norton Nurseries. A statement said: "We've made an application to the council, as trustees of the land, for permission to use land to create a world class centre of excellence for palliative care for Sheffield on the Norton Nurseries site.

"The Charity Commission has been consulted throughout the process and has confirmed that our application is appropriate.

"A formal response from the trustees of the land is yet to be received. We, like more than 15,000 who have signed petitions, still strongly believe that Norton Nurseries is the best site for a new St Luke's Hospice for the city.

This will make good use of land which cannot currently be accessed as parkland.

"We have become aware that the leader of the new ruling party in Sheffield has issued a statement on our proposal and we welcome his comments regarding how he wishes to see St Luke's develop and flourish.

"We note Coun Scriven's intention to formally invite us to join in discussions about the future of the hospice."

Sheffield Central MP Richard Caborn, who supports a move to the nurseries, said he welcomed the invitation to have an informed discussion about the future of the hospice but Norton Nurseries should still be considered.

"I hope that Paul Scriven, as leader of the council, will weigh up all the options objectively and base the decision on the best interests of St Luke's and the people of Sheffield."

Mr Caborn insisted that the nurseries were not part of Graves Park. "It is not green space, it is a walled horticultural centre."

Nick Williams, of the Friends of Graves Park, said it was a shame that St Luke's had not taken notice of the opposition 12 months ago. "They have wasted a lot of money."

But he added: "We wish them well in the future. I hope they find a suitable place. We have suggested several and had them thrown back in our face."