PLANS for a £170million overhaul of a city centre shopping mall look likely to be approved next week.

The proposals for Eldon Square, in Newcastle, go before Newcastle City Council's ruling executive Wednesday October 20.

If it goes ahead, it is expected to create 2,000 construction jobs as the centre expands by 468,000sq ft, and will create a further 1,000 retail jobs on completion.

It is a partnership project between the council, Capital Shopping Centres and Shell Pension Fund.

John Abel, managing director of Capital Shopping Centres, said: "Now almost 30 years old, Eldon Square remains a major attraction to shoppers and retailers, but lacks some of the facilities provided by today's modern shopping centres.

"Our proposals will ensure that Eldon Square retains its status as the city's principal shopping attraction and consolidates Newcastle's position as the North-East's premier town centre.

"Discussions are being held with one of the major department store groups for the new, south end anchor store and initial talks with other national multiples indicate strong retailer demand linked to the proposals."

The first phase will see a new bus station constructed in Prudhoe Street, and the closure of the existing station in Percy Street. It is reliant on £11m in grants from Government Office North East, and an announcement on the funding is expected in December.

Phase two will see retail units redeveloped on the east side of Blackettbridge, which is the ground floor of the centre.

The final part of the scheme will see a new department store and larger retail units built south of Nelson Street, taking in the Greenmarket. Existing traders in the indoor market will be relocated to the Grainger Market.

Council leader Peter Arnold said: "This is the largest redevelopment in the city centre since Eldon Square Shopping Centre was constructed in the early 1970s.

"The three schemes will secure Eldon Square's place at the forefront of modern retailing for many years to come and they demonstrate the Council's commitment to working with private industry to regenerate Newcastle City centre."

Planning permission has already been granted for the proposals.

The council still has to approve financial and compulsory purchase arrangements which will allow the schemes to progress. Work could begin next year with completion in phases through to early 2009.