Hotel dream revived at Scots castle

• Ambitious plans to turn Taymouth Castle into a luxury hotel could be back on track if negotiations succeed. Picture: Stephen Mansfield

A London-based investment firm has confirmed it is in talks with KPMG, administrator of the Taymouth Group, which was behind the project to turn the 19th-century, A-listed Taymouth Castle in Highland Perthshire into the most luxurious hotel in Scotland.

The building, once visited by Queen Victoria, had been earmarked for 74 million transformation, but work stopped four years ago amid rumours of financial problems. KPMG was called in as administrator last year when the firm collapsed.

Martin Mortimer, development manager with investment firm Meteor Asset Management, told The Scotsman: "We are in advanced dialogue with KPMG, which is looking very positive. We are hoping to make a further announcement within four to five weeks.

"We are looking to purchase the whole of the Taymouth Estate, including the castle - it would be a great shame to break it up. That would include completion of the renovation works at the castle, an enhancement of the golf course and pushing forward with proposals that would be very similar to the original, appropriately developed in the estate."

He said the company had been examining the project for several months, despite the difficult economic climate. "I feel it should happen,| Mr Mortimer said. "What it needs is a long-term investment view to deliver the right product. It is a unique site and we feel we can bring something that Taymouth and Perthshire would be proud of."

Blair Nimmo, head of restructuring at KPMG in Scotland, said it had been working to find a buyer for the castle and its assets since being appointed in March last year. "We are currently negotiating a sale with an interested party and are confident a positive conclusion will be reached," he said.

News of a potential buyer was welcomed locally. Councillor Ken Lyall said: "I think everyone in the area will be delighted if there is a potential buyer for the castle and I hope it can be put back to its state of former glory.

"The castle has been in a state of disrepair for a number of years and I am sure any serious bidder or buyer will be welcomed."

The gothic-style castle, built by the 4th Earl of Breadalbane in 1810, stands on the site of the older Balloch Castle, built in 1550. The later building was constructed on a much larger scale and no expense was spared on its interior, which was fitted out with extravagant carvings, plasterwork and murals. It played host to Queen Victoria for four days in 1842, during her first tour of Scotland.

Plans for the hotel scheme at Kenmore, by Loch Tay, were approved by Perth and Kinross Council in August 2004.It involved the creation of 13 luxury suites in a restored east wing and the construction of a new north wing with 72 hotel suites.