A NEW £2.5 million hotel will open in Blossom Street, York, in summer 2001, creating 60 jobs.

The budget 80-bedroomed accommodation, known as a Premier Lodge, will be built next door to the Windmill pub by leisure company Scottish & Newcastle.

Work is due to begin by December.

It is part of the company's £100 million investment plan in the budget accommodation market announced today, following acquisition of Greenalls pubs, restaurants and lodges last year.

The York Premier Lodge, for which planning consent has been granted, represents a big upgrade on Scottish & Newcastle's original scheme for a £1 million conversion of the Windmill pub into a 42-bedroom hotel.

The new hotel will have six-foot beds rather than the standard five-foot, and TVs which can be watched from the bed or the bath.

The massive investment will see all the old Greenalls budget hotels, plus Scottish and Newcastle's, rebranded as Premier Lodges.

The network of hotels will increase from just under 100 in England, Scotland and Wales to 148, creating 1,500 jobs by the end of the year.

A spokesperson for Scottish & Newcastle said that York's Windmill pub, which was to have been converted into an hotel in the original plans, will now remain untouched.

The new hotel next door will have its own bar and restaurant.