AMBITIOUS plans to create a prestigious centre for the arts in the heart of Southampton are set to take a further step forward today.

Members of the council's Cabinet are due to discuss an application to the Arts Council of England for £5m to be used for the multi-million-pound redevelopment of the former Tyrrell & Green site in Above Bar into a centre for the arts.

Two huge glass towers containing 200 high-quality apartments overlooking Guildhall Square and East Park will be created on the site if the plans are given the final go-ahead.

They will form part of a new "cultural quarter" in the city along with a centre for the arts costing more than £8m which will be located under the towers.

Originally, the council had hoped to build a "stand-alone" arts complex on the site costing an estimated £19.3m.

The new, scaled-down plans will see apartments built on the site but with an arts complex underneath the building which will house a performing arts centre, the Art Asia project and facilities for media project City Eye.

There are also plans for an upgraded, replacement Gantry Arts Centre as well as new facilities for the John Hansard Gallery which will be part- funded by an Arts Council Grant and money from the City Council.

Funding for the new centre is set to come from the £5m grant and money the council raises from the sale of the site to developers - estimated to be about £2.8m.

Cash to pay for the ambitious project will also come from a £750,000 grant from the Arts Lottery to Arts Asia as well as £500,000 which will have to be found from other grants over the next three years.

In the report, which is due to be presented to the city's ruling Liberal Democrat cabinet later today, leisure bosses warn that the Arts Council may only stump up £4m instead of the planned £5m needed to fund the scheme which is due to be completed by 2006/7.

The report warns that the plans may have to be further "scaled down" if the extra cash cannot be found.

The proposals will be put to a meeting of full council before they are finally approved.

Leader of Southampton City Council Councillor Adrian Vinson said: "This is a very exciting development that will breathe new life into the Northern Above Bar area, giving real substance to the development of a cultural quarter round the Guildhall."