Plans for £8 billion redevelopment of Battersea power station announced

Plans for an £8bn redevelopment of Battersea power station were announced last night as a precursor for a series of trade deals that the Government hopes will be clinched during the Olympic Games.

The Malaysian owners of the iconic building are to create 33,000 jobs, comprising 20,000 building jobs and 13,000 permanent posts, as they convert the building into a Thames-side complex containing shops, offices, homes and a hotel.

The listed building has been semi-derelict for almost 30 years since it stopped generating electricity and a series of proposals to convert it have fallen by the wayside. Among them was a bid to develop a huge indoor theme park based around Britain’s industrial heritage and a proposal for a giant shopping mall.

Work on the redevelopment scheme, which will also encompass an extension of the Northern Line underground and the construction of two tube stations, is set to begin next summer.

Several bids were received for the power station – including a proposal from Chelsea FC to build a stadium on the site – after it was put up for sale in February.

The Malaysian developers, SP Setia and Sime Darby, were chosen and have formed a consortium with the Employees' Pension Fund of Malaysia to transform the power station. It is understood the deal will be finalised in September.

Boris Johnson, the Mayor of London, said: “It is brilliant this historic landmark that helped power London for much of the 20th century will be at the centre of this huge regeneration project that will also help power the capital to even greater economic prosperity in the 21st.

“In the coming weeks, with major global investors in town for the games, I am embarking on a gigantic schmooze-athon to highlight this and the wealth of other amazing investment opportunities that exist.”

Ministers held back the Battersea announcement until the eve of the Global Investment Conference in London that will be attended by many of the world’s leading business figures and policy-makers.

David Cameron has said he hopes the Olympics will help to generate trade deals and investment worth £13bn in the long-term. They include £1bn of deals the Government expects to announce this summer.

The Prime Minister will tell the conference: “My message today is very simple: Britain is back open for business and we are committed to supporting global growth with open trade between our nations.

“So invest in Britain, partner with Britain. Not just to invest in this country, but because this is the place, the hub, from which your company can grow and expand.”

Speakers at the event include the International Monetary Fund director general Christine Lagarde, the Bank of England Governor Sir Mervyn King and Google’s executive chairman Eric Schmidt.

Nick Clegg, the deputy Prime Minister, said: "The Olympics presents us with a once-in-a-lifetime opportunity to boost the UK's growth potential. Our world-beating innovation in green technology and advanced manufacturing are on show for a vast global audience, and today we can be proud of those achievements.”