A HOTEL deal has been agreed that pushes forward plans for a new "civic square" development off Edinburgh's Royal Mile.

Two Premier Inn hotels, with 257 rooms in total, could be built in a £150 million Caltongate proposal.

The agreement is between development consortium Artisan Real Estate Investors and Whitbread, which owns Premier Inn.

Lukas Nakos, Artisan's managing director, said high-quality hotel provision will be the cornerstone of the development.

He said: "We will be placing strong emphasis on the quality of design and materials to ensure both hotels reflect their historic Royal Mile setting as well as ensuring that the wider area benefits from the increased visitor spend."

The hotels are expected to be part of a wider mix built around a "pedestrian-friendly" urban centre. The plans include open public spaces with retailers, restaurants, homes and offices.

John Bates, of Whitbread Hotels and Restaurants, said: "This is another outstanding deal for Premier Inn. It gives us more than 257 new bedrooms in central Edinburgh and also our first new Hub by Premier Inn outside London."

Centred around a £6.5m civic square, Artisan claims the development will bring a new community facility and nearly 200 homes. The company claims the development will contribute £43m to the local economy each year.

A council hearing on the plans is due in January and if approved work could start by the middle of next year.