ONE of York's most controversial "eyesores" could be transformed and given a new use, according to city council officials.

Agents for the owners of the controversial White Swan Hotel, in Piccadilly, have begun discussions with City of York Council planning officers aimed at transforming the site.

Proposals include turning the dilapidated building into a shopping complex or leisure development.

The disused hotel - owned by Reginald Graham and his daughter, Melanie Boyd, and valued at £2 million - hit the headlines in April when two dozen squatters occupied it for several weeks and turned into a "peace hotel" before being evicted.

Before then it stood empty for many years and was voted York's worst eyesore five years ago.

But now progress is finally being made to give the site a new lease of life.

In a report to a councillors Cliff Carruthers, head of development control, says: "Agents acting for the owners of the property have indicated that their clients are considering various potential uses for the property.

"Suggested uses include the establishment of ground floor shops with upper floor offices, the conversion of the building into a retail store, or leisure development, with ground retailing use."

Mr Carruthers said the agents were in discussion with several "interested parties", but it would take some time before agreement was reached and a planning application submitted.

"The agents note that the works to the building will involve substantial refurbishment and an improvement to its external appearance," said Mr Carruthers.

Security measures, put in place by the owners since the squatters' eviction to keep people out, were carried out without planning consent, but officers have recommended that no action be taken while the negotiations over its future take place.

Mr Carruthers says: "Formal enforcement action is unlikely to achieve swift improvement to the appearance of the building and the best course of action would be to monitor the ongoing discussions on future use of the building."

The matter will be discussed by members of the planning and transport city centre area sub-committee tomorrow.

The firm of solicitors acting on behalf of the White Swan's owners, Bircham Dyson Bell, declined to comment.

Updated: 11:07 Wednesday, August 06, 2003