IT is the £450m “world class” vision that council chiefs believe will transform Southampton into one of Europe’s most dynamic waterfront cities.

Instead of a rotting and rusting heap of metal slowly falling into the sea, a brand new luxury hotel could rise up from reclaimed land overlooking a marina flanked by swanky new restaurants and bars, offices and a casino.

Residents and visitors would be able to enjoy improved access to the waterfront around the Royal Pier site, while an enlarged Mayflower Park will provide a bigger and better home for the Southampton Boat Show, the future of which will be secured for years to come.

The dream for the long-awaited transformation of the city’s prestigious waterfront can today be revealed as Southampton City Council names Morgan Sindall Investments as the company it wants to develop the site.

But can such a dramatic and expensive project become a reality against the backdrop of tough economic times or is it another grand scheme destined to go no further than the drawing board?

Having studied proposals from three firms, Southampton City Council is about to sign an exclusivity agreement with Morgan Sindall Investments Limited (MSIL).

They will now spend the next year working together, with joint owners Associated British Ports and The Crown Estate, to attempt to finalise the radical plans to transform the derelict and decrepit Royal Pier district into a gleaming landmark destination.

The council is quick to stress the plans are just a template for how the 60-acre site could be redeveloped, and not necessarily a sign of what will happen, with the bid process more about selecting the right firm to work with than the project it has devised.

MSIL’s initial concept would require Red Funnel ferries being moved to a new home and the demolition of the existing Holiday Inn hotel.

None of these plans has yet been considered in detail, but council bosses want to have a finalised proposal to be put to the public for consultation within 12 months.

If the scheme does get off the ground and everything goes smoothly, building work could begin at the very earliest by the end of 2013.

Council leader Royston Smith said: “I am sure a lot of residents are as pleased as I am that the Royal Pier Waterfront is being brought back to life.

“MSIL is financially strong and will bring a large number of jobs to the city.

“Despite the current financial climate, Southampton continues to attract interest for developments in the city and the council is working hard to create many more jobs for residents.

“I am confident MSIL will create a scheme that will place Southampton as one of the most dynamic waterfront cities in Europe, but also to create a legacy for the city of which everyone can be truly proud.”

Lib Dem group leader, Cllr Adrian Vinson, said it was “good news at last”, but warned: “This is the third attempt to get this scheme off the ground.”

Cllr Sarah Bogle, Labour’s economic development spokeswoman, said: “I hope it’s successful, but I know it’s very difficult and there’s been a lot of history in the past. It’s all about money, and it is very difficult at the moment.”

Each of the developers pitching for the prestige deal had to produce a vision of a “major mixed-use development of sufficient scale and quality appropriate for a world class waterfront destination”.

The brief included a permanent and improved site for the boat show, an enhanced Mayflower Park, improved public access to the waterfront and better pedestrian access to the site.

MSIL’s concept includes a multi-storey four or five-star 200-bedroom hotel overlooking the redeveloped area, at the heart of which could be a new marina.

Around 200,000 square feet of commercial floorspace for a casino, restaurants and bars would be wrapped around the water, while the Holiday Inn may be replaced by a new two or three-star hotel and more offices.

The current car park of the De Vere Grand Harbour Hotel could also house a new residential development. It is understood Kuti’s Royal Thai Pier would not be affected by the redevelopement.

Ernie Battey, executive chairman of MSIL said: “Being south coast-based and familiar with Southampton, I know how important it is to achieve an exciting and vibrant development for which we can all be proud.

“This key site provides the opportunity to position Southampton at the forefront of internationally recognised waterfront schemes and MSIL has the experience, knowledge and financial stability that will be crucial to its successful delivery.”

Additional reporting by Matt Smith