WORK has begun on a £6.5m project to transform Pavilion Square, one of Scarborough's biggest eyesores.

Scaffolding has gone up on the site and the developers hope to have the first stage of the project completed by Easter 2007.

The scheme to bring the historic area back to its former glory with new apartments, offices and shops is the idea of businessman Gary Ledden and his father, Joe.

The first phase of the restoration project involves work to improve and extend 14-17 Pavilion Square and 1-3 Pavilion Terrace.

He said: "The properties should be ready for occupation by Easter 2007. We will then start on the second phase which should only take a year to complete as vehicular access is easier."

The Pavilion Hotel was owned by the Laughton family from1908 until 1961, when it was taken over by Broadland Properties. It closed 35 years ago and was demolished in 1973.

Properties on the site of the former hotel include a Somerfield store, bookmaker Coral and the former tourist information office.

Broadland Properties had offices above, but has since moved to the site of the former St Catherine's Hospice, in the resort's Scalby Road.