There will be no crassness here

President Havel aims to ensure that hand-me-down Seventies architecture does not ruin Prague, writes Jonathan Glancey Foreign firms are responsible for dreary buildings

At the beginning of the year, Prague City Council called off an architectural competition for the design of a 180-room hotel to be built near the famous Charles Bridge in the magnificent historic centre. Jan Koukal, mayor and chairman of the jud ges, said no designs were good enough and, although he had signed a 25-year lease agreement with the Four Seasons hotel chain, a second competition would have to be run.

Vaclav Havel, President of the Czech Republic, has praised the decision as the "first victory for common sense" in the battle to save Prague from rapacious overdevelopment. In a letter to the council, Mr Havel raises objections to other putative buildings, including the Prague Business Centre on Petrske namesti, the Hypo-Bank building on namesti Republiky and to a Ritz-Carlton hotel on Na Prikope.

Mr Havel is not against new construction, but with a weather eye on crude commercial developments taking ugly shape in former Eastern bloc capitals - notably Budapest, Moscow and Warsaw - he is concerned that one of Europe's most beautiful cities will beswamped in a sea of crass office blocks, conference centres, shopping malls and hotels.

And he has every reason to be worried. Even if foreign investors are held back at the old gates of Prague, they are setting up camp on the fringes of the Czech capital. The President has yet to comment on the $110m (£72m) "multi-use development" planned by Arabella, a Saudi business conglomerate, which wants to build a sprawl of luxury flats, offices and other business buildings on one of the city's last patches of unspoilt fringe parkland.

The council's "victory" is one that other former Soviet bloc capitals might want to emulate. If not, they will be spoilt as they struggle for commercial success. What they might want to learn from the most successful and dynamic western European cities -Paris, Frankfurt and Barcelona among them - is that an investment in the best modern architecture and urban planning encourages, in turn, high-quality business ventures. Buildings that help to generate lucrative long-term investment are not just office blocks and shopping malls, but museums, opera houses and theatres. At the end of the 20th century, culture is commerce, as much a part of a modern European city's financial lifeblood as banks, shops and trading houses.

One's heart goes out to those architects desperate for work who feel they are building the wrong buildings in Eastern European cities. In Warsaw three teams of city architects are drawing up plans for hulking great office blocks in the historic Plac Pilsudskiego quarter. "These are hard times to think of building the museums or libraries we should see near the tomb of the unknown soldier," said a city architect assistant, "but there's no sense blocking development for another 20 years." This is a shame - what Warsaw needs is not meritricious office blocks along the lines of those we have begun pulling down in Western Europe, but a mix of commercial and cultural buildings.

A glimpse, however, through any property journal covering commercial development east of Berlin shows how much cities such as Budapest, Prague and Warsaw are under threat. If they gain a short-term economic boost, it is because investors are thrilled by their cheap labour rates (as the Japanese are by low-rent Britain) and low expectations caused by economic desperation. The amount of "Western-style" office space in Moscow is expected to double this year; very little of it will bear a second glance.

These threats to great cities would be bad enough if simply a sign of the desperate thinking of politicians, architects and developers. However, they are not. Architectural firms from the United States, Britain,

and elsewhere in Europe are responsible for dreary and demeaning buildings. They may be hungry for fees, but they really should know better.

In the Seventies, British architects were among those who fell over their Kickers and Nature Treks to rush up hideously ugly and inappropriate buildings throughout the oil-rich Middle East. Ancient traditions - where these existed - were thrown to the desert winds. Every nasty, glittering, Dallas-style, reflective-glass block was designed to gobble up energy and appear as slick and as dumb as possible. What a waste of professional skill, building materials, labour and land.

Today, architects have turned attention to Eastern Europe, where, until very recently, planning laws have been slack as developers promised fast bucks to near-bankrupt cities. It is good to see Vaclav Havel and Prague's Mayor Koukal fighting back, especially as they have their backs against the old city walls. Not now, but maybe in a few years, they will be in a position to call far more shots than they have been able to during the five tumultuous years since the fall of the Berlin Wall.

Prague and Budapest have already become chic tourist haunts; Warsaw and Moscow have a long way to go. What none can afford to do is encourage crude foreign development in the guise of hand-me-down Seventies architecture. Such misplaced money will undermine their very attractiveness, and, cheap labour aside, they will have nothing to promote them into the favoured ranks of Paris, Frankfurt and Barcelona. Keep writing the letters, Mr Havel.