Cowgate blaze site overhaul gets the go-ahead

Councillors have unanimously approved the controversial plan – which includes a 200-bedroom hotel, shops and glass walkways – and work is expected to get under way in the autumn.

The project, dubbed SoCo by the developers, would also include a business centre and a new breakthrough on to Chambers Street.

But developer Whiteburn Projects, which released new images of the project today, will need to return to the planners to address concerns about the height of a "tower" rising up from the Cowgate, which will house hotel bedrooms, and the materials used on the South Bridge facade – described as "boxish and angular" by Tory councillor Cameron Rose.

However, these are not considered to be major barriers for the scheme.

Space for a 6000 square feet festival venue over two floors is also being created in SoCo, but an operator for the former home of the Gilded Balloon has still to be found.

The building work will also force the closure of Faith nightclub on the Cowgate for around nine months.

However, the city's clubbers will be delighted to hear that the legendary La Belle Angele nightclub is to be reinstated in the basement of the new complex.

Business leaders and councillors today paid tribute to the scheme, which will take around two years to complete.

City Centre councillor Charles Dundas said: "There is not a single brick that the architect has put in place without thinking why it is there from a heritage perspective and I find it hard to find anything to disagree with here.

"It is a listed building of the future."

It has now been more than six years since a major fire ripped through the heart of the Old Town.

Tory councillor Joanna Mowatt added: "The lack of housing will be disappointing to some people but I don't personally see how it would have worked on this site and I think overall it will be a bonny addition to the city centre."

Heritage groups such as the Cockburn Association and Edinburgh World Heritage and figures including author Alexander McCall Smith had raised concerns about the height and frontage of the hotel on to South Bridge.

Graham Birse, deputy chief executive at Edinburgh Chamber of Commerce, said: "I don't think I've ever been to a planning committee where they have been so happy about a development.

"This is great news for a site which has been derelict for too long.

"The important thing we do now is make sure this happens as soon as possible, particularly given the economic challenges Edinburgh is facing and will continue to face. What this shows is developers who are thorough about respecting heritage and come up with sound proposals will get a good hearing at the planning committee."

John Shepherd, chief executive of Edinburgh-based developer Whiteburn Projects, added: "I am really happy. It was a good decision and the enthusiasm from the councillors was unexpected but great.

"What this development will do is make the vital connections between South Bridge, Chambers Street and the Cowgate, which really opens up this part of the city."