A prime Birmingham city centre location – used as a car park for more than a decade – could be developed into a new commercial district with a hotel and offices.

Plans for the second phase of Nikal Group’s Masshouse scheme, 60,000 sq metres of commercial space, retail and a 200-bed hotel and apartments, all set around a new central square, are due to be decided upon by Birmingham City Council on December 6.

The first phase of the £600 million gateway to Eastside project – the construction of two apartment blocks – has already been completed by Masshouse Developments, part of Manchester-based Nikal,

Phase two was originally due to have featured a new £81 million magistrates’ court but the project fell victim to Government cuts.

That development – which would have replaced the Victoria Law Courts – is now on ice until public finances improve.

The site of the second phase of Masshouse has not been built on since before the Masshouse Circus roundabout was demolished in 2002.

Planning permission was granted for the site in 2008, but the development hit the buffers in the recession and Nikal has now submitted a revised planning application featuring several amendments.

The new public square has been relocated from the centre to the edge of the site, with one side open to The Priory Queensway.

The office buildings have also been reconfigured.

Nikal development director James Payne said the changes would create a “more inviting” environment for pedestrians using the area as a link between the new city centre park at Eastside and, when completed, Birmingham’s high speed rail terminus.

“Our original scheme was conceived in a very different economic climate,” he said.

“To ensure we are delivering a new commercial district fit for the city’s future demands, we have made changes to our consented scheme that will still ensure exemplary space while focusing on satisfying future market demand and quicker delivery.

“One of the key alterations sees movement of the proposed square that will open up the development, creating a more inviting environment and enhancing the pedestrian route connecting the city Park and HS2 to the Colmore Business District and Snow Hill area.

“It also increases the benefit of being south-facing, giving occupiers more time to enjoy the space for longer and creating a truly inviting environment.”

The application allows for the scheme to be built in stages, with any single building and the new public space able to be developed first, depending on market needs.

The Masshouse development has been beset with problems. In 2008 development partner David Mclean Group went bust and earlier this year Nikal was told to hand back more than £250,000 in deposits to unhappy buyers after apartments were delivered two years late.

Birmingham Chamber of Commerce president Steve Brittan welcomed the new planning application.

“If this plan gets the go-ahead it will provide a welcome move in what has become a long-running saga,” he said.

“The development of the site has been beset with various problems, not the least of which was the economic downturn. It will be good to finally get it under way because it is located in an important, showpiece area of the city centre.”

Wouter Schuitemaker, investment director at inward investment programme Business Birmingham, said: “A key part of the wider redevelopment of Birmingham city centre, Masshouse is currently one of the only schemes in the city to provide potential investors with a strong supply of new Grade A office space.

“Long term, its location means businesses can benefit from the new High Speed 2 terminal at Eastside and a supply of skilled graduates from Birmingham City University’s new campus.

"We are working closely with Nikal to ensure that investors recognise Masshouse as a highly attractive location that provides a natural entry point into Birmingham.”