PLANS to transform a derelict landmark city building into a major hotel have been revived – a year after they appeared dead in the water.

Developers Downing – owners of the Port of Liverpool building and The Capital – have submitted plans to open a Marriott in the former Scandinavian Hotel in Liverpool’s Chinatown.

The building, some of which dates back to 1859, has sat empty since the 1980s and was supposed to re-open in time for the city’s 2008 Capital of Culture celebrations.

Last night, Downing said after a number of setbacks it was pleased to finally be making progress and hoped the hotel would open by 2012. The project involves a £20m refurbishment of the building on the corner of Duke Street and Nelson Street to create a 180-bedroom Courtyard by Marriott branded hotel.

Downing’s Paul Houghton said the company had agreed heads of terms with Marriott and hoped to start work in summer if planning permission was granted.

He added: “Downing is very pleased to be bringing forward the development for this key site.”

Downing is the council's preferred developer for the key building and plans to convert it into a hotel were first floated in 2001.

Last January, Liverpool council was poised to start the legal process to tear up the development agreement for the key building, which it won the local authority right to compulsorily purchase in 2005, due to lack of progress.

It has now emerged that behind the scenes the city agreed to give Downing more time.

Previous hotel designs envisaged widespread demolition of the 1930s warehouse at the back of the building. Downing's latest plan involves completely refurbishing the Victorian front which will house a lounge, bar and restaurant with 26 rooms on the upper floor. The bulk of the bedrooms will be in the warehouse.

The planning application states: "Although the facades suggest otherwise these two elements essentially form a single open and deep planned warehouse which is ideally suited for conversion to guestroom accommodation.

"During design development, it was clear that to achieve the best layout it would be necessary to work within the existing structural grid and this has resulted in bedroom layouts that are longer and thinner than the brand standard."