Whitbread, the chain's owner, has been forced to invest heavily in Beefeater to compete with the explosion of money spent on restaurants by its main rivals and the rapid increase in the number of pubs offering decent food. The relaunch, including a new menu and brand, will be supported by a pounds 10m television advertising campaign, its first for four years.
Simon Wood, managing director of Beefeater, said: "We needed to differentiate Beefeater in an increasingly overcrowded eating-out market. We want to become the M&S of the eating out world."
Whitbread is also planning to open another 10 Travel Inns, which offer budget accommodation, alongside Beefeater restaurants within the next year.
However, some analysts are sceptical about the move. One said: "They will have to work hard to get decent returns from the investment as there is so much competition out there."
Opened 23 years ago, Beefeater has 297 restaurants and serves 19 million customers a year. But its image has fallen behind the times. The group considered dropping the Beefeater name but concluded it was a strong enough brand to survive.
Beefeater became famous for offering cheap family meals. In the early 1990's it introduced ethnic dishes but has is now returning to a predominantly British menu.
The dining market has grown rapidly in recently. Nearly a half of the population now eat out more than once a week.