A bidding war is expected over the former Royal High School on Calton Hill after the city council cancelled a long-term legal agreement to breathe new life into the A-listed building.
Council finance leader Rob Munn revealed there were “a number of interested parties” seeking to take over the building, which has been lying empty since 1968.
However the Cockburn Association heritage watchdog has urged the council to ensure it puts “public benefit over economic value.”
The council’s decision has been welcomed by the backers of a bid to turn the 19th century building into a specialist music school and concert hall, which has planning permission, but is by no means certain to go ahead amid concerns it may not be the most suitable alternative.
Duddingston House Properties and Urbanist Hotels had urged the council not to put the building out to “the commercial real estate market” after an appeal to the Scottish Government was rejected in October.
A dossier for councillors stated: “It seems inconceivable that such an important building will simply be sold off to the highest bidder.”
The proposed new home for St Mary’s Music School, which is seeking to “acquire” the building so it can relocate from the west end, has been championed by the city’s main heritage bodies.
However the council has decided against going straight into a new deal with the Royal High School Preservation Trust, which has been pursuing the project on behalf of the school for several years.
An official council report said this “would not test the most suitable use of the property and may therefore not be best value for the council."
Council finance leader Rob Munn said: “We know there are a number of interested parties out there and I think this is also the best and fairest way to proceed. A report with further details on how we’ll take this forward will be considered in May.”
The hotel developers, who declined to comment on the decision, had pleaded with the council for a reprieve after offering to reduce the number of hotel rooms from 125 to around 75 following the rejection of two previous planning applications.
However they admitted that the proposed hotel operator, international chain Rosewood, had already pulled out.
William Gray Muir, chair of the music school trust, said: “We very much look forward to being in the position to present the exceptional benefits that a new national music school, public gardens and concert hall can bring to the city.”
Cockburn Association chair Cliff Hague said: “Thousands of Edinburgh citizens objected to the hotel, so ending the current impasse is welcome.
"The music school scheme seems an excellent alternative, worthy of continued support. Any other proposal must ensure as wide a civic and public benefit as possible for this finest example of Greek Revival architecture in the world.”
Edinburgh World Heritage director Christina Sinclair said: “Together with our partners, we will continue to argue for a sensitive, appropriate and sustainable use for this crucially important building. The music school proposal is one such potential use, there may be others.”