Squatters take over £6m Mayfair house

An elegant Mayfair property valued at more than £6m (even in today's depressed market) has been occupied by anarchist squatters. The penniless youths from the self-styled Da! Collective have become neighbours to some of the wealthiest individuals, swankiest restaurants and well-heeled businesses in the country.

The Grade II-listed, five-storey building with 9,000 sq ft of floor space, at 18 Upper Grosvenor Street, Mayfair, belongs to the Duke of Westminster, Britain's wealthiest private landlord, and is leased to a property firm registered in the British Virgin Islands. It now carries a black anarchist flag, flicking in the breeze.

Five squatters made their entrance last month by donning high-visibility jackets, to make them look like builders, and putting up a rented ladder against the front of the building. One man climbed up on to a balcony, and was delighted to find an unlocked window.

They have since connected up to the utilities, and say that they will pay their energy bills. Bedding paraphernalia, rucksacks and "artworks" cover the floors. The new tenants feed themselves by rummaging in bins. They claim that far from damaging the house, they are improving it after years of neglect, and deny that they are breaking the law.

"Other people can come here," one of the squatters, 21-year-old Stephanie Smith, said. "We want people to use it as project space. People can work here, stay wherever they want."

The building was the headquarters of the Iranian-born property tycoon Vincent Tchenguiz until 2005, when his Consensus Group moved into bigger premises in Park Lane. The house is considered big enough to accommodate a firm employing 310 staff.

Throughout its 250-year history, Upper Grosvenor Street, near Hyde Park, has been considered to be one of the most desirable residential areas of central London.

No 18 is one of only 15 of the street's original houses, built in the 1730s, still standing. Its former owners include a colliery owner, F Wooton Isaacson, and a Scottish landowner and Conservative MP, Sir Victor Warrender.

In addition to the US embassy around the corner in Grosvenor Square, the street houses the consulate general of Monaco and the offices of the British Virgin Islands Tourist Board. An empty two-bedroom flat near the anarchist squat is up for sale for an asking price of £1.65m.

A City law firm has been engaged by the official tenants, Deltaland Resources, to reclaim the property. Squatting is not a criminal offence in British law, but a civil matter, and if squatters remain for 12 years, and no attempt is made to evict them, they can become the property's legal owners.