26-storey hotel plan for Leith

Edinburgh for hundreds of years. The original plans for the first stages of the 700 million regeneration of Leith Docks have been ripped up by landowner Forth Ports because of the economic slump.

Now it has set its sights on creating Edinburgh's tallest building along with shops, restaurants and facilities that it hopes will attract more visitors to Leith.

Full details of the plans have not been announced, but the Evening News can reveal that it will include the 26-storey hotel which would dominate the skyline and tower above the nearby Chancelot Mill at Western Harbour.

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A new iconic venue to rival Cardiff's Millennium Centre also forms part of the plans. It will end a hunt for a new 6,000-plus seat indoor concert arena.

The Royal Yacht Britannia will also move to a new berth – as originally planned – but it will now be joined by a new military vessel, rumoured to be HMS Edinburgh, in a move that aims to make a major tourist attraction out of Leith's maritime history.

The change in the plans comes because the company did not want to commit to building nearly 2,000 homes and a new office district in the current economic conditions.

Councillor Tom Buchanan, the city's economic development leader, said: "All developers are having to change plans and reschedule because of changes in the economic position the world is in.

"Forth Ports – with its takeover no longer going ahead – will be looking at how it can get value for its shareholders.

"There are opportunities in the hotels market for Edinburgh and it is only in areas like the Waterfront that you will be able to punch a bigger hole in the skyline."

He added: "We are always keen to see that opportunities for better quality architecture are expressed at the Waterfront because we want it to be as attractive a place for tourists as is possible."

It is thought that Intercontinental Hotel Group – which had planned to move into a new 17-storey hotel at Haymarket before the plans were dumped following a public inquiry – will be among the front-runners to occupy the hotel. The Jumeirah Hotel Group, which runs the Burj Al Arab in Dubai – unofficially dubbed the world's most luxurious hotel – and the luxury Hyatt chain is also among those known to be eyeing a move to Edinburgh.

The new plans are for the first two of nine "villages" on brownfield land at Edinburgh Harbour.

Under the original plans, 1,870 homes were to be built but it is thought that will be reduced to around 1,000. A 99,000 square feet office district is also expected to be scrapped.

Full plans are expected to be lodged later this month.

Cllr Jim Lowrie, the city's planning leader, said: "In a few weeks we expect a new application for the two villages around Ocean Terminal that will be quite different to what they had planned before.

"It will really be a new proposal. It is a new scheme. They have one 26-storey hotel in the corner that is quite a lot higher than the Chancelot Mill and they have a new entertainment building and two smaller hotels.

"Most of the housing has been knocked back and they are putting in smaller shops as well."

A spokesman for Forth Ports would not comment in detail on the plans, but said: "This is an exciting and visionary development which will bring a wide range of benefits to Leith and the wider community."