THE firm behind the axed £250 million hotel development next to Edinburgh's Haymarket railway station is to bring forward new plans for the site, The Scotsman can reveal.
Irish firm Tiger has embarked on fresh negotiations with the city council over a new masterplan for a gap site which has lain empty for more than 40 years.
Architect Richard Murphy has already held initial talks about a new scheme with the developer, which has revealed it is fully committed to the site. It said it was "working hard" to find a new way of transforming it.
The Scotsman has learned that outline plans are expected to be produced for the council by the end of November. Senior councillors yesterday said they were "optimistic" a new scheme would be viable.
Speculation has been mounting that the company would either walk away from the site or mothball it for years until the property market improves.
Sources close to the developer, however, say that abandoning the site is seen as a "last ditch" option. It is thought Tiger will go back to the drawing board rather than simply scale back the height of the 17-storey hotel that triggered so many objections.
The height was opposed by inspectors from world heritage body Unesco, Edinburgh World Heritage and the Cockburn Association, which led the protests against the scheme at a public inquiry earlier this year.
The inquiry report was highly critical of the effect the building would have on the area, as well as on classic views of St Mary's Cathedral and Edinburgh Castle. It also condemned Mr Murphy's design of the scheme for "failing to respect" existing buildings in at Haymarket.
One insider said: "There is no alternative scheme on the table, but work is already under way to produce a new vision for the site. Walking away isn't an option."
A spokesman for Tiger told The Scotsman: "Our vision to create a new gateway to the west side of the city received a huge amount of support from local people, businesses and Edinburgh City Council.
"The development would have been a great boost to the local economy and would have created a vibrant new quarter.
"We remain committed to the site. We're now working hard with the council and other stakeholders to find a new way of transforming the derelict Haymarket site into an exciting part of this historic city."
Council planning convener Jim Lowrie said: "We still want a five-star hotel to go ahead there and we are in favour of some kind of landmark. The inquiry reporter was not against the whole development; it was the height and bulk of the scheme that was the major concern.
"But we don't think the scheme is dead by any means."