ON the face of it, an old cowshed does not sound like the ideal place for a slap-up meal - but John and Sue Morley thought otherwise.

They wanted to expand the bed-and-breakfast business at their farm overlooking Whitby and the Esk Valley, North Yorkshire. Now the restaurant they created in their former cowshed has become a huge success with tables booked for weeks in advance.

The 100-seater-plus Stables Restaurant, at Cross Butts Farm, opened in November with the help of cash backing from the Department for the Environment, Food and Rural Affairs (Defra) rural enterprise scheme. They also created 12 B&B apartments using local builders and local materials.

The popularity of the restaurant has surprised everyone involved. It has quickly developed a loyal local clientele. Its chefs source much of the produce from local farms and from Whitby's fishmarket.

The hotel and restaurant now employs 28 staff, ten of whom are full-time.

Co-owner John Morley said: "The hotel and restaurant have been open for several months now and we have been rushed off our feet.

"We're particularly delighted by the new restaurant, as it's popular with tourists and local diners alike, and we are getting really positive feedback from our customers."

Defra advisor Christine Clark said: "The project will benefit both the Morley family and the North Yorkshire tourist industry.

"Cross Butts Farm is a great example of how diversification can help farmers continue to work on their land.