About 550 jobs could be created if the firm behind the regeneration of Newcastle's Quayside gains approval to weave its magic on Durham City.

Developer Amec transformed the look of the Geordie riverbank, attracting enormous business investment and tourists, and it now hopes it can do a similar trick on Durham's Walkergate site.

The firm unveiled a revised project costing £25m which it claims would create 250 construction jobs and 300 in the businesses there.

The scheme, which will take 18 months to build, will transform derelict land currently used as a car park.

It will build a 94-bed hotel, six restaurants, a bar, 35 apartments and 500-space multi-storey car park below the city's Millennium City development, which includes the Gala Theatre.

It said its "high quality development" would boost tourism and the local economy and help ease the city's parking problems.

It also said the development would improve access between the city centre and the river, particularly the new Penny Ferry footbridge.

The development, which is part-funding Millennium City, originally featured a multiplex cinema but an operator could not be found.

Amec surveyor Dan Needham said leading operators shelved their acquisition plans due to problems being experienced from over-expansion in many other cities.

He said: "This has led to mothballing of auditoria and extensive rationalisation and mergers within the industry.

"The forecasts for the industry over the next three to five years are not good and we can't go down an economic cul-de-sac with a project that is neither viable nor sustainable.

"We have therefore carried out an extensive reappraisal of the site, in consultation with the local authority, to assess the most appropriate uses and we've considered a number of options.

"We believe the end result will be a particularly high quality, mixed-use environment, which will provide a fitting extension to the Millennium City development and provide a true asset which will help to boost tourism and the city's economy.

Mr Needham said: "While it is a smaller scale project than the one we undertook at Newcastle Quayside, we are confident that we would be able to deliver the same high-quality design, mix of uses and vitality which would enhance and complement the historic city centre in Durham."

A planning application has been lodged with Durham City Council.

Work could start in the summer, finishing in 2004