Worth £700m, the regeneration will cover a 40 acre site of the city centre.

The aim is to produce a high street shopping area to rival cities across the UK, with names like Harvey Nicholls showing interest.

The Paradise Street bus station and Moat House hotel will both be demolished under the scheme.

They will be both be replaced by new hotels, apartments and restaurants.

Much of the money for the scheme has come from the Duke of Westminster, whose Grosvenor Estates company is part of the development consortium.

The scheme is expected to be completed by 2008, although the major construction phase is not due to start until next year.