WORK is set to start on a multi-million pound residential development in Diglis, Worcester.

Albion Mill, which formed part of the Royal Worcester Porcelain works site, is being converted into apartments at a cost of £12m.

Development of the Georgian mill, which is in the canal conservation area, is going ahead despite residents' objections to its change-of-use on parking grounds, when it went before the city council in June.

Plans for the former flour mill, built around 1815, include constructing an extra storey on top of the building, housing penthouse apartments, as well as an open-air courtyard accessing the canal towpath. A minimum of 20 affordable homes, in addition to 66 luxury ''loft-style'' apartments, are also part of the plans.

Neil Grinnall Homes, which has bought the building for an undisclosed sum, sees the Albion Mill as another step in the firm's "urban regeneration" plans for Worcester city centre.

The site is opposite Neil Grinnall's Diglis Road and Bath Road apartment developments, also fronting the canal, and the company is also converting the old Kays catalogue buildings, in The Tything.

"Albion Mill presents us with a tremendous opportunity to showcase our ability to tackle complex urban regeneration projects," said Neil Grinnall, chairman.

"Several developers have considered the site since it became derelict four years ago, but no one has had the foresight to see it past the initial planning stages."

He said the converted apartments would retain some original features of the building and the firm would be working "very extensively" with the council's conservation department on the project. Work is due to start in the spring and is expected to take 18 months.

"I am very proud that we are able to reclaim a disused, historical building such as this and restore it as a crucial element of Worcester's canalside regeneration programme," added Mr Grinnall.

Plans for a multi-million pound redevelopment of Diglis Basin were put before the city council, in June, by developers Taylor Woodrow and British Waterways. Plans for the 26-acre site include 450 new homes, cafes, restaurants, a community centre, parkland and cycleways.

Albion Mill was used by Royal Worcester Porcelain mainly for storage.

No one was available at Royal Worcester Porcelain to comment at the time of going to press.