After recording more than half a million extra visitors last year - the highest figure since 1985, the V&A has revealed a £150m makeover to 'transform' the museum over the next decade.

A three-phase new layout of galleries is planned - the museum's biggest redevelopment in 50 years, in order to make the museum more visitor friendly and enhance exhibition areas. 'The museum is an extraordinary historic building but it is complicated and the layout often confuses people,' said Mark Jones, who was appointed as director last year.

The main principles of the development are to re-structure the museum as a city with a series of 'quarters'; to form a cloister of galleries around the garden and make the collections accessible to visitors. 'The focus of the plan is to bring clarity to the V&A by ensuring that the collections are easy to understand and magnificently displayed,' said Jones.

The second phase of the plan is the £75m construction of The Spiral, designed by Daniel Libeskind to house contemporary displays of design and craft, fashion, photography, architecture and the graphic arts.

The scheme will cost more than was spent on either the Tate Modern or the British Museum's Great Court, and is in addition to the V&A's £31m British Galleries. The sourcing of the £150m is unclear, although some funds may be hoped for from the Heritage Lottery; £1m has been donated anonymously. Details +44 (0)20 7942 2000.