East Broadway.

Mr. Tony Smith, of A.F. Smith Trading, who owns Lane House and the old Waterfront restaurant building, said he could have more news of the project in a few weeks.

It would be similar to Waterloo House on Pitts Bay Road, he said, and would involve keeping historic Lane House in its "present design''.

Mr. Smith added he hoped to include nearby Wilkinson Trust property in the project, and was waiting for their agreement.

He had abandoned plans to build luxury condos on the site following a downturn in the market. Mr. Smith took over the properties after a controversial plan to build apartment and retail towers fell through.

Mr. Smith's project may affect Government plans to extend the new four-lane highway. Preliminary plans last year suggested the highway could go up to Spurling Hill.

But the Works and Engineering Ministry said the idea would not be looked at seriously until the recession "turned around''.