Objectors admit Caltongate defeat

The decision by Scottish ministers to rule out a public inquiry has provoked a furious response from protesters.

But campaigners cannot challenge the ruling, and demolition work can start as soon as legal agreements are signed.

Green MSP Robin Harper, who led calls for a public inquiry, today said ministers and councillors will "pay the price" for "architectural vandalism". But business leaders welcomed a "sensible decision".

Yesterday's decision ended months of uncertainty over the plans, which involve the biggest development of the Old Town since the 12th century.

The former New Street bus depot and two C-listed buildings – the Sailors' Ark and the former Canongate Venture school – have been or will be demolished and replaced with a five-star hotel, a conference centre, and scores of shops, offices and homes.

The scheme won the backing of local politicians in February, but required ministerial approval because of the level of opposition – around 350 individuals and organisations between them lodged more than 1800 objections. The council also has a financial interest because it owns the arches in Market Street.

Developer Mountgrange hopes to sign the legal agreements quickly so work can start with a view to completing a first phase by 2012.

Bill Cowan, spokesman for the Old Town Association, today said the campaign has "exhausted" all avenues. "There's nothing more we can do," he said. "Our only hope is that in the current financial climate, the whole thing comes unstuck."

Mr Harper added: "It's depressingly predictable – an SNP/Lib Dem authority seeks to punch a hole through our World Heritage Site, and an SNP administration seeks to let them get away with it."

The plans also include a cultural quarter, around 200 homes, bars, restaurants and cafes, as well as a new street linking Princes Street to Holyrood.

Deputy chief executive of the Edinburgh Chamber of Commerce, Graham Birse, said today: "This has been a long haul – but at last ministers have endorsed the sensible decision taken by Edinburgh councillors to revitalise a rundown area of the Old Town with a quality development that will bring with it jobs and prosperity to Edinburgh city centre."

A spokeswoman for Mountgrange added: "Caltongate offers a once-in-a-generation opportunity to significantly improve the fabric and feature of Edinburgh's Old Town. Our 300m urban regeneration project will deliver up to 2000 new jobs."

Council leader Jenny Dawe also welcomed the decision, and said the development "will play a huge part in securing the economic, social and cultural life of the city centre".

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