Now, on the eve of an official visit that might lead to the city being stripped of the title, senior figures have cast doubt on whether the city benefits from it and have warned that it is in danger of holding back progress in the capital.
When Edinburgh's historic heart was awarded World Heritage status in December 1995, it was widely seen as a major coup. It would have seemed fanciful that just over a decade later, Edinburgh would be facing the prospect of losing the title. But rather than shudder at the thought of this, many are questioning the value to Edinburgh of having World Heritage status – as well as the right of Unesco to put the city under the microscope.
Koichiro Matsuura, director-general of Unesco, sparked outrage on a visit to Edinburgh in August when he urged the city to call a halt to major developments until a review of its World Heritage status is completed next summer.
Now, economic development leaders have warned the city should not been seen as an "isolated monument". They claim major schemes such as the replacement for the St James Centre risk being delayed or shelved by "anti-development forces peddling fears about the impact of World Heritage status".
Tom Buchanan, convener of economic development for the local authority, believes that rather than being a "badge of honour," Edinburgh's World Heritage status is in danger of becoming a symbol of a lack of confidence and fears for the future.
He concedes that City of Edinburgh Council research has found that more than two-thirds of visitors to the capital cite its historic environment as the main inspiration in booking a trip. But he said there was "considerable dereliction and decay" in the Old Town, while the New Town suffered from a poor streetscape, congested roads and, on Princes Street, "second-rate and under-used" buildings.
Mr Buchanan said: "It is not just major developments which see anti-development forces peddle fears about the impact on the World Heritage site. We regularly see the world heritage site being used as a tool to champion stagnation and fight against almost any development in the city. I hope Unesco remembers our World Heritage status was awarded to Edinburgh as a living city, not as an isolated monument or structure."
Neil Baxter, the secretary of the Royal Incorporation of Architects in Scotland, said: "We are concerned over recent sabre-rattling from Unesco, particularly their threat to withdraw World Heritage status unless major planning decisions address their specific requirements. The careful conservation of the best of the past must be set alongside judicious new development within the weave of the city. Unesco is a hugely important force for good, but we allow it to become the arbiter of the future of the capital at our peril."
Ron Hewitt, the chief executive of Edinburgh Chamber of Commerce, said: "We know of developers who have said they will not invest again in Edinburgh because of the time it takes to progress major applications."
Four major schemes will be examined by Dr Mechtild Rssler, Europe and North America chief at Unesco's World Heritage Centre, and Professor Manfred Wehdorn, of the International Council on Monuments and Sites, between tomorrow and Friday. They will be briefed on the Caltongate scheme earmarked for the Old Town, the towering Haymarket hotel development, the proposed replacement for the St James Centre and the regeneration of Leith Docks.
Supporters and critics have been invited to meet the Unesco duo, who will be meeting also some of the strongest critics of the council and the way it has handled major applications. Senior officials from Historic Scotland and Linda Fabiani, the culture minister, are also expected to play host to the delegation, while the council has lined up visits to Edinburgh Castle, the newly-refurbished Grassmarket and St Andrew Square, and the site of the Cowgate fire, which is earmarked for a major hotel development.
Sally Richardson, spokeswoman for the Save the Old Town Campaign, which is battling the Caltongate development, said: "It appears that the council, along with the development lobby, place no importance on Edinburgh's World Heritage status. Many concerned people in the city now believe they would happily see it removed."
Jenny Dawe, the council leader, who will host a private reception tomorrow, strikes a more diplomatic tone than her colleague Mr Buchanan, perhaps conscious of the bad publicity that could dog Edinburgh during Unesco's inquiry. She said: "We do value having World Heritage status, the last thing we want to do is lose it."
Adam Wilkinson, director of Edinburgh World Heritage, declined to be interviewed by The Scotsman. It is understood his organisation faces being stripped of the 1.5 million in funding from the council and Historic Scotland if it is overly critical while the inquiry is ongoing. However, in a statement, he said: "There is broad agreement that the needs of heritage, development and the city's different communities can be accommodated, and the mission is here to see how we work towards that goal. Their experience, with an overview of over 850 world heritage sites, will be enormously useful."
Moira Tasker, director of the Cockburn Association, the city's other leading heritage watchdog, said: "Edinburgh's strength is the quality and drama of its physical setting and environment. We should seek to build on this strength to attract residents, visitors and businesses. Cities are living organisms which need care, renewal and development. World Heritage Status does not prevent this; it enhances Edinburgh's attractiveness as a place to live, work and visit."
A spokeswoman for Historic Scotland said: "We welcome the opportunity for the Unesco inspectors to understand each of the proposed developments that the city council have been considering."
Developments under scrutiny
CALTONGATE The most recent controversial scheme to be approved by Edinburgh's planners is also believed to be have triggered Unesco's interest in the city's world heritage status. However, the 300 million development earmarked for a huge swathe of empty land near Waverley Station is also the most advanced of the projects Unesco is looking at. It was approved by the Scottish Government in June. Two listed buildings and a block of Royal Mile tenements will make way for a five-star hotel under developer Mountgrange's plans
The site of the Haymarket development, a former goods yard, has lain derelict for more than 40 years. The city council had been planning to redevelop the site but agreed to sell it to Irish firm Tiger, which has pledged 1,700 new jobs. The current car park at Morrison Street would be replaced by the 17-storey five-star hotel, a three-star budget hotel, offices, shops and restaurants. However, critics have compared it to an "alien spaceship from Dr Who" and warned that it will ruin the skyline.
ST JAMES CENTRE
The redevelopment of the notorious shopping centre and the former Scottish Office is widely seen as the most important city-centre development in a generation. A new shopping arcade, two hotels, 250 flats and a new multi-storey car park are planned by Henderson Global Investors. However, the developer has been forced to scale back a "gherkin-style" tower at its heart after a string of heritage groups complained.
More than 15,000 homes are expected to be created by developer Forth Ports over the next 30 years. Although detailed plans are yet to emerge, concerns have been raised about the scale of iconic tall buildings that are planned .