A DERELICT tower block plagued by drug users and squatters could be given a new lease of life.

Owners Waterbridge say interest in Teesside House, in the centre of Middlesbrough, includes multi-million pound plans to open a bar and restaurant on the lower floors, with possibly flats on the other levels.

While workmen erected metal cladding to keep out squatters, Ian Taylor, Waterbridge's asset manager, spelt out what the future could hold for the derelict building.

He said: "We are talking to about half a dozen interested parties. The majority of interest is from local developers.''

Teesside House - which housed the offices of the former Cleveland County Council - has been empty since 1997, but Mr Taylor said the interest in it had been encouraged by Middlesbrough Council's plans for a piazza-style civic square and art gallery yards from the site.

Waterbridge has discussed the potential of the building with Government and council agencies.

Mr Taylor said: "I am very confident that, in the near future, we will be able to agree terms with either a purchaser who will be looking to redevelop the building themselves or will be able to secure tenants to take a number of floors.

"It has been a challenging building. We are committed to the building. We are not going to be spending speculatively, but, of course, if we have someone to take the building, then we are more than happy to commit a considerable sum of money to refurbishing it.''

Drug users have been squatting in the building spurring on Waterbridge to install metal sheet cladding around its base - without waiting for Middlesbrough Council approval.

A council spokesman said: "We are trying to progress this as quickly as we can and trying to work with the owner through very serious problems.''

Cars parked near the building have been regularly broken into and staff at an adjacent caf say they have suffered intimidation, and sweets and metal spoons have been stolen.