THE administrators of Morecambe's famous art deco Midland Hotel have asked Lancaster City Council if it will now compulsorily purchase the Grade II Star listed building because they cannot find a buyer for it as a hotel.

Following the withdrawal of the latest prospective developers at the contract stage, the administrators Sills and Betteridge say that they have received "another serious offer" for the historic hotel, built by the LMS in 1930.

But they are concerned that this offer will not pass the planning hurdle because the city council believes that it must remain a hotel without any associated residential development.

This latest offer is from a Lancashire firm which proposes to retain food use of the ground floor for a bar, restaurant and club but also wants to see residential use of the upper floors. It is also understood the developers would like to use adjacent sites and even the Winter Gardens in some way.

Charles Abbott, for their selling agents Turner Evan Stevens, said that in this scheme the listed features of the building would be preserved and the public would still have access to them.

"But we can only accept the offer if the council agree to these things," he said, "whereas up to now, apart from giving permission for a casino at the hotel, the Council has insisted that it should be retained as a hotel with no element of residential use, and no other associated development. That has put off all the one hundred developers who have expressed an interest because they all wanted to be able to develop it for other uses such as a residential home, timeshare and flats. Some even wanted to close the upper floor whilst others wanted to build another storey".

But he said that no one had been interested in the building as a hotel alone, even hotel groups who had been approached. They all said it would no longer be viable as such, saying " it's pretty, but it's too small and it's in Morecambe".

With restoration costs rising as the building deteriorates - it closed as a hotel last November - the value of the building had gone down to £400,000-£600,000.

"We would sell it at that - but not for nothing," said Mr Abbott. "Although the council and others say it is now worth nothing, we cannot accept that."

Graeme Wade, of Sills & Betteridge, said: "We are desperate to get the building off our hands, not least because it is costing £500-£1,000 a week to maintain as a building. We'd be happy for the Council to have the building, but they would have to purchase it at a price fixed by the Lands Tribunal. We were approached about giving it to the Council for nothing, but we have a duty to the creditors and to the estate, which is insolvent, to get as much as we can for it."

He said he had now asked the Council if it would compulsorily purchase the building using its powers under the Planning Acts applying to Grade II listed buildings, but he had not yet had a reply. He said his firm would not object to any compulsory purchase order and would agree to the Lands Tribunal price. Both men said they hoped that the people of Morecambe understood their position with regard to the building. "We are not in any way being obstructive. We want to cooperate with the Council, English Heritage and anybody else with an interest in the building to ensure the best deal for it", they said.

Mr John Donnellon, the council's Director of Regeneration, commented: "We would consider compulsory purchase as a last option, but would prefer to examine all other options first - and will continue to work on that. The council would also rather still see it operating as a hotel. With regard to possible change of use, English Heritage would have to be convinced that other avenues have been explored. The Council recognises other avenues have been explored, but needs to prove that. The main aim is to bring the building back into use."