PLANS for a £170m overhaul of a city centre shopping mall look likely to be approved next week.

The proposals for Eldon Square, in Newcastle, go before Newcastle City Council's ruling executive on Wednesday. If approved, it is expected to create 2,000 construction jobs as the centre expands by 468,000sq ft. It will create a further 1,000 retail jobs upon completion.

The project is a partnership between the council, Capital Shopping Centres and Shell Pension Fund.

John Abel, managing director of Capital Shopping Centres, said: "Now almost 30 years old, Eldon Square remains a major attraction to shoppers and retailers, but lacks some of the facilities provided by today's modern shopping centres.

"Our proposals will ensure that Eldon Square retains its status as the city's principal shopping attraction and consolidates Newcastle's position as the North-East's premier town centre.

"Discussions are being held with one of the major department store groups for the new, south end anchor store and initial talks with other national multiples indicate strong retailer demand linked to the proposals."

The first phase will see a bus station constructed in Prudhoe Street, and the closure of the existing station in Percy Street. It is reliant on £11m in grants from Government Office North East, and an announcement on the funding is expected in December.

Phase two will see retail units redeveloped on the east side of Blackettbridge, which is the ground floor of the centre. The final part of the scheme will see a new department store and larger retail units built south of Nelson Street, taking in the Greenmarket.

Traders in the indoor market will be relocated to the Grainger Market.

Council leader Peter Arnold said: "This is the largest redevelopment in the city centre since Eldon Square Shopping Centre was constructed in the early 1970s."

Planning permission has already been granted.