The construction of a new shopping centre on prime land in the centre of Knysna resumed on Tuesday after building was put on hold, following the discovery of what was suspected to be contaminated soil beneath the site.

Pam Golding Properties' Roger Gallagher said examinations undertaken to ensure the soil did not pose any danger to humans, indicated the soil was not contaminated.

"All the tests proved there was no contamination. We have done what needed to be done, followed all precautions and we have been given the green light (to resume construction)," Gallagher said.

A Knysna town planning and environmental official, Gregg McCoulough, previously said construction would only resume after the soil suspected to have been contaminated had been removed from the construction site to another site where it would be treated.

An agreement was reached on Friday last week between the Department of Water Affairs and Forestry, the Knysna Municipal Environmental Authority and the National Parks Board that the developers would follow established recommendations, which were set by officials. "We have reached a point where we have issued them (the developers) with municipal recommendations.

"Soil samples were taken for tests and low concentration of petroleum and hydrocarbons were found," McCoulough said.

"We then took more samples and screened them for more things because we did not want to compromise anything and the results came back negative," he said.

The Old Noetzie Quarry and the Gouna Quarry were identified as the sites where bio-remedial treatment would be conducted on the soil to establish whether it was polluted.

An official from the National Parks Board identified the suspected soil pollution a month ago when he walked past the construction site and picked up an unusual smell.

He alerted the Knysna municipality of his suspicion.

The site was previously occupied by a McDonalds fast food outlet and before that by two service stations.

However, McCoulough could not confirm whether the service stations were responsible for the pollution.

While further investigation was being conducted on the soil, construction was put on hold because of fears of possible serious threat to humans.

The construction site was closed for more than three weeks.