The South East England Development Agency (SEEDA) has agreed to provide a £6m contribution towards the £30m redevelopment by the Osborne Group of the 2.1 hectare Oxford Prison and Castle site immediately to the west of the town centre.

A signing ceremony between SEEDA chief executive, Anthony Dunnett – who declared: "Try to catch the vision!" – and Councillor Margaret Godden, deputy leader of Oxfordshire County Council (OCC) to mark the agreement, took place in the A-wing of the prison building on 13 June.

Also present, amongst others, was Trevor Osborne of the Osborne Group – who said that they would be transforming the site "from a prison of foreboding to a place of enjoyment," – and Debbie Dance of the Oxford Preservation Trust.

£4.5m of the money will be used to support Osborne’s mixed-use development of the prison complex, which closed in 1996.

This will include a 4-star prison-themed hotel – to be operated by the Malmaison group – which will consist of a new structure on New Road and the conversion/reconstruction of some of the existing prison buildings.

In the 18th century A-wing, 35 hotel rooms will be created, mainly using three former cells for each room, with two forming the living space and one the bathroom. A few larger rooms will be made up of four cells.

The existing walkways and balconies will be retained but upgraded to conform with current building legislation. The original cell doors will also be kept and their spy holes enlarged to enable guests to see out, but the jump nets between the balconies are to be removed.

Elsewhere, C-wing – which will be partially rebuilt – the prison entrance and the Governors House will all be incorporated into the hotel, with the former Houses of Correction being converted into both accommodation and a health and fitness facility. The former Governors office building, which is to be extended, will contain a restaurant and wine bar.

The former exercise yard is to be transformed into a patio and garden, overlooking one of a number of new breaches in the prison walls to permit public access to the site, this having been a local council requirement of any planned development.

To the east of A and C wings and with an open space between them, a new B-wing will be constructed on the site of the original. This will be a mixed-use building, with restaurants and cafés on the ground floor and serviced apartments on the other four floors.

Restaurant operators Carluccio’s, La Tasca, The Living Room and Dexter’s have so far agreed to open outlets at the site and the Osborne Group is currently in negotiations with two further companies.

The remaining £1.5m of the SEEDA award will go to the Oxford Preservation Trust (OPT). This will be used – along with a further £1.8m Stage 1 grant from the Heritage Lottery Fund – to fund the restoration of the adjacent Oxford Castle mound and 11th century St George’s Tower and to create a Heritage Centre and museum incorporating D wing and the Debtor’s Tower of the prison.

Also part of the OPT’s plan is the creation of Oxford Castleyard, a new public square adjacent to the mound.

Work on the whole project – which includes archaeological investigations – is already well underway, with opening scheduled for late February/early March 2005.