A RUN-DOWN area of Bishop Auckland is to be given a new lease of life through a business development.

The Wear Valley Hotel, in Newgate Street, the town's main shopping area, has been derelict since it was gutted in a fire in 1994.

Now the Asda supermarket chain has received planning permission to demolish the building and replace it with offices.

Once the site has been developed, the offices will be sold on to another business.

The site backs on to a derelict foundry, which Asda is planning to convert into a £15m store.

A public inquiry opened two years ago into the merits of the development of Wilson's Forge, but so far no decision has been announced.

A spokeswoman for Asda said: "The Wear Valley Hotel has been an eyesore really, and derelict for quite a while, so it would be a real boost for the area, especially in such a high-profile location on Newgate Street.