Moves to breathe fresh life into the eyesore White Swan Hotel in York have finally begun after 20 years, the Evening Press has learned.

Discussions between agents acting for the owners of the Piccadilly landmark and council development officers on its future role in the city are now taking place.

Councillors warn that it is too early to say whether the building will be used for shops, housing or even as a hotel once again.

But they add that if the millionaire family owners fail to take action within the next three months to restore the hotel frontage, officers will consider enforcement action.

Secure metal sheets were welded across windows and doors at the former 50-room hotel and restaurant to prevent squatters re-entering the property.

Activists were recently evicted from the building, which they renamed the Rainbow Peace Hotel, after protesting for more than a month about the hotel's decrepit condition and lack of use.

Ward councillor Brian Watson thanked the Evening Press for its role in putting the derelict building, voted York's worst eyesore in a newspaper poll five years ago, in the spotlight.

He said: "Everybody in the city would like to see it brought back into use. The recent publicity and the actions of the squatters have had a lot to do with these discussions.

"We cannot make the owners sell the hotel or turn it into housing, but we can make them improve its appearance."

Holgate councillor Martin Bartlett, who now has a disused terraced home in his ward occupied by former White Swan Hotel squatters, confirmed negotiations had begun.

He said: "My view is that if I was living next door to an empty building I would rather have people living there who I could trust and who are acting responsibly."

Councillors will now write to Reginald Graham and Melanie Boyd, the father and daughter who own the hotel, and more than £9 million-worth of property across the UK.

Development control manager Cliff Carruthers said: "They do need planning consent for the shutters so we do have the option of taking enforcement action to remove them."

Protesters occupied the hotel in April and staged a series of open days, concerts and art shows before their eviction. Some of the group have now moved in to the former Gimcrack Hotel, in Fulford Road.

No-one at Leeds-based property agent Insignia Richard Ellis was available to comment today.

Updated: 10:53 Friday, June 06, 2003