AMBITIOUS plans to turn the Midland into a five star hotel proved too good to be true this week as the hotel's owners put the landmark building back on the market.

Kalber Leisure's £10 million refurbishment of the art-deco masterpiece, seen as an integral part of Morecambe's renaissance, has been scrapped after they admitted that they do not have the cash to fulfil their plans.

The news has severely disappointed councillors and the Friends of the Midland who say they will continue to campaign to protect the historic building.

"We're obviously devastated," said Chairman of the Friends, Sue Thompson.

"Kalber had done all the leg work and were keen to restore the hotel back to its former glory.

Our worst fear is that a new buyer may not have the hotel's best interests at heart.

Ideally, it should be taken over by a trust using charitable funds to turn it into a real asset for Morecambe."

The Council is currently talking to Kalber to ensure that the company continues to provide security and meet their obligations as owners of a listed building.

They have indicated that they will do so and have also said that they will continue to remove the asbestos from the building.

Council Leader Cllr Tricia Heath said: "Although the Midland is not a city council building it is nevertheless a key building for the town and we are obviously very disappointed that the development is not going to proceed as planned.

It is an important landmark for Morecambe and forms an integral part of the Townscape Heritage Initiative, which the Council has secured as part of its ambition to see Morecambe capitalise on its heritage, which includes the Midland.

As far as the city council and English Heritage were concerned, plans for the building were progressing in the right direction and this news comes as a blow."

Cllr James Airey, the Council' s Cabinet member for Regeneration added: "I am personally extremely disappointed by the news.

The council is committed to the continuing redevelopment of Morecambe and will work with English Heritage, the North West Development Agency and the private sector to find a solution."

A Kalber spokesman explained the reasons behind their decision and said: "The £10m restoration project will be stopped and the hotel's visitor centre closed with immediate effect due to costs rising unexpectedly above the project's budget.

All staff at the hotel and centre have been offered a redundancy package.

Initially Midland Grand Hotel Limited projected the hotel would break even by its third year.

However, as the costs of restoration have risen following further investigation of the fabric of the building overall costs now exceed a tight budget.

This has raised concerns from the company's investors who are unwilling to commit the additional funding which would be required to proceed with full restoration.

It is felt, therefore, that the project would be best undertaken by a different owner who does not have the same budgetary constraints."

Commenting on the announcement, Mike Baron, managing director of Kalber Leisure, said: "We are deeply disappointed that we are unable to deliver our dream.

It is sad that such an exciting project should have to end this way especially with the amount of time and effort which has been expended.

We are hopeful that a buyer, who is able to fully restore this splendid building can soon be found before the hotel falls further into disrepair."