Battle of wills for Edinburgh's Assembly Rooms rages on

• The Assembly Rooms' ballroom, which has been graced by some famous figures

The council says the 9.3 million revamp will revive the building as a year-round city hub; Burdett-Coutts and his backers protest that the planned shops and a restaurant will wipe out smaller theatre spaces and kill the venue's unique atmosphere. Here, actor and Fringe veteran SIMON CALLOW adds his voice to the Burdett-Coutts campaign, while former council leader DONALD ANDERSON explains why the project must go ahead

THE THEATRE and Edinburgh – the Edinburgh Festival, to be precise – are inextricably bound up for me. Thirty seven years ago, I stepped out of Waverley Station on the first day of my first acting job. I was joining the Young Lyceum Company to act in Bchner's Woyzeck and The Thrie Estates as part of what was then not yet known as the Official Festival; in those days it rejoiced in the name of Edinburgh International Festival.

As I emerged from the concourse and laid my eyes for the first time on the city, spread out in all its considerable glory on a shyly sunny July morning – the Mound, the Castle, the National Gallery, the Scott Monument, Princes Street, all visible in a single glance – I immediately saw why the Festival had become a sort of paradigm for all festivals of its ilk: it is, beyond any of its rivals, the perfect location for a celebration of the arts, above all the performing arts, because it is itself a superb piece of theatre.

Young though I was, it was an irony not lost on me that in almost every respect other than physical, Edinburgh was not at all a suitable location for an international jamboree: unlike its rival city just a little further north, it was rather proper, staid, even puritanical. And yet somehow Edinburgh had made an accommodation with the profane arts: indeed, The Thrie Estates, a 16th century morality play, but riotously bawdy in parts (a leading character announced himself with the phrase "I maun hae a pish or burst") was being performed in the magnificently austere Assembly Hall, the Hall of Convocation of the Church of Scotland, right up there on the Mound. And as I got to know Edinburgh over the weeks of rehearsal and performance, I found that the city, both New Town and Old, had altogether opened itself up to music and theatre and dance and the fine arts, had surrendered its superlative buildings from every period of its astonishing history – medieval, Tudor, Georgian, Victorian, twentieth century – and allowed them to be used for the prancing, strutting, soothing, provoking, charming, abrasive effusions of the artists.

Sometimes the work fitted wonderfully into its venue, sometimes the contrast between the work and where it was being performed – churches, colleges, cellars, libraries, lounges – was what made it so exciting. In those days the Fringe was, if not exactly a modest, certainly a relatively small-scale presence: pubs, back-rooms, abandoned shops were commandeered, shows – sometimes inspired, sometimes moronic – were thrown on. It provided a noisy, chaotic descant to the noble and majestic theme of the Festival itself. But it was still very much part of things, and very much part of Edinburgh, part of the self-willed invasion of Dionysos which exploded the city once a year.

Then, as everybody knows, the balance changed: the nature of the International Festival as it was (when artists would stay for the duration – I remember seeing, in 1973, Daniel Barenboim, Peter Ustinov and Geraint Evans strolling arm in arm from one side of George IV Bridge to the other, while Teresa Berganza, Plcido Domingo and Claudio Abbado were strolling across it in the opposite direction) altered under the pressure of jet-setting schedules, and the Fringe started to come of age: production values were transformed, challenging artists came from all over the country, and soon from all over the world, and started queuing up to appear on the Fringe: it became a creative powerhouse, a breeding ground for comedians, an exhilarating alternative to what was Official.

The great turning point for this glorious expansion of the Fringe was in 1981 when William Burdett-Coutts and Roger Spence persuaded the Edinburgh corporation to allow them to transform the superb Assembly Rooms on George Street – where Dickens and Thackeray had read, where Paderewski and Rubinstein had played, where Gladstone had campaigned – from Festival Club into a sort of Fringe Palace, a complex which hosted, over the duration of the Festival, dozens and dozens of shows in a warren of individual venues. It was immediately a huge success. I never stayed away from Edinburgh for long after my first season there, coming back again and again, and, like everyone else, I always made a bee-line for the Assembly Rooms.

Not only could you hardly fail to find something extraordinary out of all that was on offer, but there was a unique buzz about the place, a kind of bubbling anticipation. What was utterly superb about it was its location, slap in the middle of the New Town, and its physical beauty – a place, like all the best theatre spaces, that was an event in itself. It was also quintessentially Edinburghian, and almost a metaphor for the small miracle that the now triumphant Fringe represented: at the very heart of the city, in one of its most renowned and most admired buildings, heavy with history, was a daily explosion of anarchy, fun, emotion, innovation, imagination, energy. I did two one-man shows by Dickens at the 2008 Fringe Festival, and the experience was electrically super-charged. Even arriving at the Assembly Rooms was thrilling, weaving my way through the human stream that flowed inexorably to the venue, a crowd awash with excitement, anticipation, belief in the power of the live event.

And now it seems that the City Corporation has decided that this uniquely vibrant powerhouse of wonder and joy is not what George Street needs at all – what it needs, what Edinburgh needs, what the millions of theatre-hungry visitors to Edinburgh need, you will be fascinated to discover, is more boutiques and restaurants, commercial ventures with which Edinburgh is already groaning (and which fail on a regular basis, as the many empty locations in George Street will eloquently testify). It is for those messes of pottage that Edinburgh will lose its single most brilliant Fringe venue, the very hub of the Fringe, its beacon, the magnet for all talent.

I am not a resident of Edinburgh, although I never miss an opportunity to come to the city, in or out of Festival time, but I am aghast at this proposed vandalism. The city will be immeasurably the worse for the loss of this uniquely beautiful and vibrant venue, and the exchange of it for a couple of eateries and shops is a shocking insult to Edinburgh. It must be fought tooth and nail, while there is time, of which there is alarmingly little.

A project that can't afford to fail

Former Edinburgh City Council leader Donald Anderson writes: Kath Mainland, chief executive of the Festival Fringe, is right to speak up for the remarkable entrepreneurs who help deliver what is still the world's premier arts event.

The success of venue operators and the big businesses is a great if untold story of the economy and arts life of Scotland's capital. However, that does not mean that it is right that much needed investment in the Assembly Rooms should be delayed again, or cast aside. I well remember as member of the council being involved in discussions with Bill Burdett-Coutts over plans in February 2007. I think that any concern that the council has rushed into this decision is difficult to sustain.

The council has faced enormous pressures to invest in the facilities that support the summer Festivals, and there is much pride that can be taken from what is being achieved. The Usher Hall has been completely renewed and there is now the opportunity to deliver a world-class facility at the Assembly Rooms. And let's remember, this is a project that is actively supported by Historic Scotland - and not just in words, it is investing real cash in helping save the Assembly Rooms from further decline and decay.

I fully understand that those who have seen the venue successfully operate during the Fringe will be concerned about change, but the fact is that those with the interests of the city and the festivals at heart should be more concerned about what will happen if the project does not go ahead. If this project falls, 6 million of investment will be lost. To replace that loss, more funds will need to be taken from other projects and priorities. I have to say, if there is 6m more to be found for investment in the city, I think that there are two venues south of George Street that should be priorities as well. The Kings Theatre and former Odeon Cinema are crying out for investment. Securing the future of the Assembly Rooms can help move the debate on to those other priorities.

And what about the shops? Well, I actually think shops, as well as the arts, are a good thing, and further investment in Edinburgh's "Golden Mile" of retail along George Street will help make the city centre a more attractive destination for residents and visitors. In addition, it will create real jobs all year round. In a city where we have gone from having three jobs for every Jobseeker, to having three Jobseekers for every job, the value of that should not be underestimated.

The call from respected local government figures such as Councillor Eric Milligan and Councillor Lesley Hinds for a robust and healthy debate should be respected.

Debate is a good thing as well, but at the end of the day a decision is overdue, and Edinburgh needs to deliver rather than discuss this investment if the Festivals are to retain their global appeal. The time for delay has passed and the time to decide has come.