King's and the battle for Somerset House

King's College London is engaged in a bidding war with a big hotel group for the right to expand its campus – and has even asked the Prime Minister for help.

King's College London may be one of Britain's most prestigious universities, but the physical fabric of its law department is dire. One staff member says it is "Dickensian". An academic describes its condition as grim. "I was here as a student in the 1960s and nothing has changed," says a professor.

A few years ago the ceiling fell in on Professor Robin Morse, dean of the law school, who resigned in protest. This is one reason why the college has applied to buy the "New Wing" of Somerset House, a magnificent 19th-century building down the road that until now has been used by Inland Revenue. If it were able to take possession of this wing, which lies behind the west side of the courtyard adjoining Waterloo Bridge, it would not only be able to expand out of incredibly cramped premises but also develop right along the Strand and have a campus that enhances it reputation.

"This is a highly performing university," says Adam Boulton, political editor of Sky News and a member of King's College's council. "But it doesn't have the geographical identity of, say, University College London. Forging that identity is pretty vital if it is going to consolidate and move forward. It's crucial for King's to get a decent shop window."

Until a few months ago, King's thought it had an understanding with Somerset House that it would buy the building. It had been involved in persuading the Inland Revenue to vacate the New Wing and had been negotiating with the board of Somerset House about taking over the building.

"We believed we had an agreement," says a senior King's administrator. But all that went up in smoke when Somerset House realised it could probably get more money for the building from other sources. King's had offered a little over £40m but a hotel group was prepared to pay more. "We were gazumped," says a college source.

According to Boulton, it is ludicrous to think that another luxury hotel is needed in the area. "Within hobbling distance you have the Waldorf, the Savoy, One Aldwych, not to mention the conversion of Bow Street magistrates' court," he says.

So, what appeared to be a done deal has turned into a row with Sir Lawrence Freedman, vice principal of King's and professor of war studies, pitted against Alfred Akirov, head of Alrov, a hotel group based in Israel. There are other bidders but their names have not been made public.

King's College is left with the feeling that is has not been treated fairly and is pulling out all the stops to lobby politicians, including the Prime Minister, behind the scenes. Even the Queen has been approached.

But the Somerset House board is being hard-nosed because it is short on funds, and what money it does have must go into developing the place as a cultural centre for the public. The cash from the sale of the building will be used to finance the cultural activities it is there to provide and, if an international hotel group can cough up £10m more, that could well decide it.

At the moment the commercial property agents employed to assess the bids are doing just that. But if the Somerset House board decides to sell to a commercial concern such as the hotel group, the Government would have to approve a change in the lease. That is the college's last hope: that if Somerset House does decide against King's, the Government will step in and insist on a compromise.

That decision will rest with Margaret Hodge, former higher education minister and now culture minister, who visited the site recently. She has heard the arguments of both sides and understands both points of view.

She knows that King's has grown massively in the past 20 years. It now has getting on for 20,000 students and has shot up the league tables, coming in at number 24 in the world in the latest global league table compiled by The Times Higher Education Supplement.

Yet it still operates out of cramped and dingy premises and has a less-than-impressive entrance tucked away on the Strand. Its competitors, UCL, Imperial and the LSE all have more impressive buildings.

Arguably, the development of Somerset House site to accommodate a bigger, better King's College would not only be good for King's but also good for British higher education, which is why Professor David Eastwood, chief executive of the Higher Education Funding Council, is in favour. There are precedents for government buildings being kept for public, andeducational, uses, the most recent being Chelsea College of Art, which moved into the magnificent former Royal Army Medical College next to Tate Britain.

In a glossy brochure outlining its plans, King's College explains that it will put its law school, part of the management school and a new public policy centre in the refurbished building. The basements and vaults will accommodate culture and the arts, including a flexible performance venue, design studios and a centre for digital music.

"We are hoping that the new wing will be used by the general public because it will provide spaces that the public can visit and a new public policy centre, like the Kennedy Centre at Harvard, which would attract high-profile speakers from all over the world," says a senior administrator.

"We believe that we can unite the whole Somerset House site in a way that others can't. We can provide a link from our current campus from Surrey Street to Lancaster Place. We can integrate the whole thing."

On the other hand, the board of Somerset House, which includes Sir Simon Jenkins, the writer and columnist, and Tony Elliott, the publisher, is looking for much bigger gallery space and a home for an arts centre. It also wants to accommodate offices for arts organisations.

Above all, it wants the building to be in use all the time and is conscious that it is obliged to opt for the highest bidder.

Moreover, board members think the college's plans for public access don't amount to much, and point out that universities are closed for half the year.

King's admits that it had to put its brochure together in a matter of weeks to counter the hoteliers' bid. But it is proud of its proposals and makes several references to its award-winning conversion of the Public Records Office in Chancery Lane which has been turned into a fantastic library for students.

The board argues that there is no public access to this library or to the beautiful medieval Rolls Chapel on this site. Representatives of King's College hit back that it is impossible to give a general right of access to a library because people can walk off with precious books, but that the Rolls Chapel is open to people who ask to visit it.

Somerset House board members also argue that King's has plenty of sites to develop – the East Wing, East Street and Surrey Street. King's does not deny this. "We are developing all these," says a senior administrator. "But we need space to decamp into. The 'New Wing' would enable us to do so much more."

Boulton believes that the Somerset House board simply does not understand the purpose and potential of a university and that it would be a scandal if the hotel scheme was approved in preference to giving King's a proper frontage and a wonderful new law department and other spaces.

"A university should be a working, living part of the community," he says. "If the Government is serious about wanting universities to make their own way and build up their own foundations, it would be disgusting if they waved the hotel deal through."