A MULTI-MILLION luxury hotel development in a city centre is to include a museum on the site of the original Stephenson railway sheds.

Newcastle developer Closegate will submit plans to Newcastle City Council later this month for a £30m, 250-bedroom, four or five-star hotel on the site where the railway pioneer built his famous locomotives.

The engine sheds were the industrial headquarters of the family business run by the father of the railways, George Stephenson, and later his son, Robert.

Expected to create 200 jobs, the development will complete the west end of the Quayside and could rival York as a centre for railway heritage in the region.

The development will be submitted as a major element in a wider plan for the Forth Banks area, between Central Station and the Quayside, that will comprise the hotel, offices, apartments and leisure facilities.

Ken Hunt, director of Closegate, said he was ready to play another big part in the Quayside's revival after developing the Copthorne Hotel by the Tyne.

He said: "This is particularly pleasing for me, having gained much of my early hotel development experience leading the area's revival in the 1980s.

"We understand the heritage factor in this particular part of the city because of the history of the railway.

"Therefore it is important that there is a museum - a visual reference - to the Rocket and the seven other engines that I believe were built there.

"Of course, much of the original site is no longer here. Industry has been changing and moving on for hundreds of years. But we still intend to record the history."

The Stephenson Trust owns the site and is keen to see it put to use as a railway museum, similar to the National Railway Museum in York.

An international hotel operator is to be involved in the project, which is adjacent to the Stanley Leisure casino overlooking the Central Square development.

Closegate will be working with architects Carey Jones, the Leeds firm which designed Central Square, and will oversee the whole of the Forth Banks area.

The development team also includes Sir Robert McAlpline and consulting engineers company Ove Arup, which is working on the new phase of Central Square.