WORK has resumed on a £15m redevelopment scheme that will provide homes for hundreds of students.

Derelict ten-storey Teesside House and its two car parks are to be transformed into student accommodation in the centre of Middlesbrough, only two months after work ground to a halt and contractors ordered their staff off the site.

Carlisle Property Development has teamed up with new partners, the Mandale Group, to breathe new life into the derelict eyesore site with a £15m project to create rooms for 388 students, with built-in 24-hour security.

Work should be completed next July, well ahead of the 2006 autumn term at the nearby University of Teesside.

Cheryl Barber, financial controller for Campus Lifestyle, Carlisle's Teesside off-shoot, said: "There is going to be nothing like it in the area - modern facilities and round-the-clock security. It should be very appealing.''

The former Cleveland County Council tower block is being gutted and transformed into modern en-suite student flats, each with a plasma television, security cameras in the corridors and security staff on site.

Mrs Barber said: "It is going to be a new building with a new block built on the back of it.

"We have a new contractor in. We visited a similar project at Leeds, though a lot bigger than Teesside House. It is a fantastic thing and we could not believe the speed with which it was built. We have 100 per cent confidence.

"Teesside House has been an eyesore in Middlesbrough for years. We have been supported by Middlesbrough Council's regeneration team and the mayor, Ray Mallon.''

The council has approved plans for a restaurant or bar or shop on the ground floor where Campus Lifestyle will also be based.

When the scheme was originally mooted, Mr Mallon said it would turn a town centre eyesore into a tremendous asset for Middlesbrough.

But six weeks into starting on site, work ground to a halt amid denials of cash flow problems and fall-outs.

Within hours, Campus Lifestyle disclosed that it was in "advanced discussions" with the Mandale Group to form a joint venture on a number of student-based development schemes across the region.

Regeneration plans by Middlesbrough Council to bulldoze 1,500 elderly terraced houses in Middlesbrough, many rented out to students, has provided a spur to the scheme.