A £6M scheme was unveiled yesterday to upgrade a market town's historic public building and transform it into a new North-East theatre.

The theatre plan forms the centrepiece of moves to revitalise the 150-year-old Witham Hall, which looks imposing in the centre of Barnard Castle, County Durham, but is badly run down.

A bid is to be made for National Lottery funding and other grants to pay for the ambitious project, which has taken more than three years to prepare.

If all goes well, and planning consent is given by Teesdale District Council, the new-look hall will be ready for local organisations to start using early in 2006.

Elizabeth Conran, former curator of the Bowes Museum and one of ten trustees who run the hall, said yesterday: "The building needs a lot of urgent attention as little, apart from patchwork repairs, has been done to maintain it during its 150 years.

"Once this scheme is completed it will be a wonderful asset to the whole district as there will be amenities for a wide variety of activities. It is a really exciting venture."

A theatre is to be erected in an extension behind the present building. It will be available to the Castle Players, the acclaimed local drama group noted for its Shakespearean productions, but will also be designed to allow other uses.

Other work will include the removal of an internal staircase, alterations to windows, raising of floor levels, new suspended ceilings, and access ramps for disabled people.

The plans are to be put on display in the hall from January 5, and residents will be invited to give their opinions on them before work starts.

Trevor Watson, the council's principal development control officer, said yesterday: "I have had initial discussions about the project and have no problem with it. However, I will have to study the full plans and listen to any submissions by other parties before recommending if it should be approved."

The hall is used for a number of activities, including dancing classes, art exhibitions, table top sales and public meetings, but the trustees hope to encourage other groups to make more regular use of it.

Mrs Conran said: "We are all looking forward to having the Witham brought up to date so that it can serve the public for many years to come."