pounds 10-a-night hotel plan for County Hall

Tourists coming to London will soon be able to stay at County Hall, the former home of the defunct Greater London Council, for as little as pounds 10 a night.

One of the country's leading brewing companies, Whitbread,has signed a deal with Shirayama Shokusan, the Japanese owners of the building on the South Bank, to develop a 200-room, four star Marriott hotel and a 318-room Travel Inn budget hotel.

Alan Parker, managing director of Whitbread's hotel division, said prices at the budget hotel would be pitched at just over pounds 40 a night for a room sleeping up to four people.

Staying at the Marriott, however, will be more expensive. Rates at the Marriott in Grosvenor Square start at pounds 140 a night for four.

Leisure analysts at City stock broking firms said Whitbread had secured one of the best hotel sites that has become available in London for years. "In terms of location, being opposite the House of Parliament, it couldn't be better," one said.

There was some scepticism, however, that the deal would be concluded. Ken Livingstone, MP and former GLC leader,said: "We've had three years of Shirayama announcing this and that and nothing's happened. It's been a series of gimmicks."

Whitbread is confident thehotels will be up and running in 1998, even though Mac Okamoto, European director of Shirayama, injected caution into yesterday's announcement.

Asked whether the Whitbread deal would founder, as did previous hotel plans with Richard Branson's Virgin group, he said: "Nothing is certain in this world. It is like marriage. Who can stop someone who wants divorce? We have exchanged a contract agreement, and anyone can terminate it."

Whitbread will occupy 360,000 sq ft of space in the north wing, and an aquarium being built in the basement by Shirayama will absorb a further 200,000 of the building's total 1.2 million sq ft of space. Mr Okamoto said there are also plans for shops and more leisure facilities.

County Hall has been empty since Baroness Thatcher abolished the GLC a decade ago. "The fact that it's remained empty is the scandal," Mr Livingstone said.

Shirayama, a property development company, bought the 1920s building in 1992 for pounds 60m. Financial details of the deal with Whitbread, which is taking a 75-year lease, are not being disclosed.