Cost-cutting exercise sees Blair on move – into millionaires' row

After four years in five-star luxury, Tony Blair is moving out of the American Colony Hotel into a purpose-built seven-storey building now under construction in Sheikh Jarrah: the millionaires' row of East Jerusalem.

The new building will replace the 15 rooms Mr Blair's team rents at the American Colony for more than £1m each year. Since he was appointed as representative of the Middle East Quartet in 2007, his office and accommodation for his dozen-strong staff have been located on the fourth floor of Jerusalem's best known hotel.

The former prime minister's departure will remove a steady source of income from the American Colony just as hotel bookings in the region begin to plummet in response to the wave of unrest sweeping the Middle East.

The lease at the hotel originally expired on 30 June, but has been extended to the middle of the month to allow the completion of building work at the new location on Nablus Road.

When The Independent visited the new building on Sunday it was still under construction. Workers were hanging off the outside of the building fitting aluminium window frames. The site is screened by a high metal fence and at least five CCTV cameras, suggesting that Mr Blair's team have already installed some of the watertight security systems necessary to protect the former prime minister.

The Quartet will lease the new building from the influential Nashashibi family, who have constructed the block from local sandstone and smoked glass on land owned for decades by their family. Mr Blair and his team spend about one week in four in Jerusalem. He spends the rest of his time working for his foundation, and on commercial activities.

Officials say the move is intended to reduce costs and simplify security, though with a lease costing the Quartet about £750,000 a year, the new building will not be cheap. Sub-tenants from carefully-vetted organisations will occupy some of the space in order to offset the cost of the lease.

A spokesman said: "Yes, the Office of the Quartet Representative will be moving out of the American Colony Hotel, to an office building elsewhere in East Jerusalem this summer. This will reduce our office costs and provide more suitable office accommodation."

The move also suggests Mr Blair and the Quartet are digging in for a long haul and may be expanding their operations.

The building will house sleeping accommodation for Mr Blair and his travelling advisers, including the 24-hour security detail provided by the Scotland Yard diplomatic protection unit, but it is not clear who will provide housekeeping and laundry services.

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