A DEVELOPER has unveiled a multi-million-pound plan to restore a derelict Waterside hotel to its former glory.

Southampton based Diamond Property Holdings has bought the historic Westcliffe Hall, Hythe, from Associated British Ports (ABP) for an undisclosed sum.

The 19th century building could be reopened as a hotel or converted into offices, a nursing home or flats.

Keith Diamond, managing director of the Diamond Property Group, said: "This is a very exciting acquisition and represents an unprecedented opportunity to restore a fine, period building to its former glory.

"We're really excited about the building's potential. It lends itself to a range of options and also represents a chance to revitalise the area and improve the outlook for local residents."

Mr Diamond said the restoration of the once-majestic building was likely to cost at least £3.5m.

Westcliffe Hall occupies a prime site overlooking Hythe Marina and Southampton Water.

It was once owned by Colonel Vere Hobart, whose wife chaired a committee of local landowners that bought a house at Atheling Road, Hythe, in 1922 and converted it into the village's first hospital.

Westcliffe Hall had been used as a hospital during the First World War and the Hobarts were able to donate many of the supplies.

The three-storey building has stood empty since 1989.

In the 1990s it was raided by looters and was also hit by a series of fires, prompting police to describe it as a potential death trap.

ABP denied that the sale of the former hotel was linked to the rejection of plans for a container terminal at neighbouring Dibden Bay.

A spokesman said: "The property had been on the market for some years.

"It never formed part of the Dibden site and the disposal has no connection with the plans that we put forward for port development."