There were fears a multi-million pound plan to turn historic Birkwood Castle into a luxury hotel would falter after one of its wings caved in last year.
However the project has now been revived with builders on site to secure the Gothic mansion in Lesmahagow, Lanarkshire, and return it to its former glory.
It is part of an £80 million masterplan to transform the castle and its surrounding area into a hotel, holiday chalets and a village with more than 150 residential homes.
The castle’s owners Birkwood Estates have now teamed up with the US-based Wyndham Group, the world’s biggest hotel chain, to create a 56-room hotel.
The £15 million hotel will include an extension to the original building and will also boast a spa, ballroom and conference facilities. It is due to open in spring 2019.
A former psychiatric hospital which dates back to the 1860s, Birkwood Castle is known as one of UK’s most haunted places.
Former owners, residents and staff say the Gothic castle is stalked by ghosts including a cigar-smoking spook and the spirit of a man stabbed through the throat.
Part of its walls collapsed last summer with such force that some people in the area reported hearing an explosion. Local paranormal experts blamed the collapse on high ghostly activity at the site.
The castle was saved after South Lanarkshire Council this week approved the extension and gave the green light to the early sale of 50 houses at the site in order to pay for the £1.4 million of repairs needed to the building.
Mike Roberts, director for Birkwood Estates, said: “After working with the local authority for the last four years, we are delighted to announce that we are now deploying a scheme that combines the old Birkwood Castle with a new modern extension.
“Once open, we hope Birkwood Castle and Birkwood village will satisfy the demand for high quality stays within Scotland.”
Planners at the council had recommended the castle be saved be with Michael McGlynn, executive director community and enterprise resources, saying: “The applicants are now requesting a variation of the orginal planning condition to permit the early release of 50 houses for sale.
“This would enable funding to be generated to allow the Wind and Watertight Works to be completed and the carrying out of works up to a point when a fit out could be undertaken.
“Evidence has been provided that shows this programme is essential to ensure the long term future of Birkwood House and with it the economic benefits of creating a high quality hotel facility.
“As a result, the partial relaxing of the condition is considered to be pragmatic at a time when the economic climate is challenging for developers.”
Past incidents at the castle have included strange smells, lights turning themselves off and the sound of footsteps. According to local folklore, a boy called Michael is said to stalk the grand spiral staircase where he fell and died.
And it has even been claimed the figure of a doctor who suffered a heart attack and died while working at the hospital has been seen at windows.
In 2013, ghosthunters Glasgow Paranormal Investigations filmed an episode of their series Haunted Planet TV there with the crew saying it was one of the most active locations in which they had filmed.
The estate originally belonged to the MacKirdy family and the castle was used as a private residence until it was donated to the local authority in 1923.
The B-listed building was boarded up in 2002 and has been lying empty since.