MANY years ago Dennis Chester, then going to university in Scotland's capital, would stare in wonder at the chaos of Edinburgh's Market Street.

Dozens of businesses - hotels, shops and grocery stores - would be picking up their fresh fruit and vegetables, and more produce would be being delivered. It was a colourful, vibrant, and, in his words, a scene of "mayhem".

For forty years, Mr Chester, has run a club, venue and bar on Market Street. Its name has changed over the years, but it is at present called Electric Circus. And for the past two years, he and his wife have been in cordial discussions with their neighbour - The Fruitmarket Gallery, at no.45 Market Street over the subject of some significant change to the venerable old street.

The gallery, a leading venue for contemporary art from Scotland and abroad, has long looked to improve and revamp and expand its building - but it is perched, like its neighbour, on the edge of Waverley Station. It is almost impossible to expand backwards onto the station, and, given the nature of a World Heritage site, is reluctant to extend upwards. So the gallery, led by director Fiona Bradley, would like to expand sideways into Mr Chester's building, 36-39 Market Street.

Now both buildings are owned by the City of Edinburgh Council and are leased. Mr Chester and the Fruitmarket's agreed that the gallery should take over his building's lease, an arrangement which was given the green light by councillors last week.

But the time being, and, he thinks, for the next two years or so, Electric Circus will remain very much open. As news of the Fruitmarket expansion was reported last week (in this paper), Mr Chester says some people thought Electric Circus is to close imminently - not so. "Everyone thought we were closing, but we are still very open, " he says.

It is not being forced to close - the plan to hand over the lease was agreed between both parties and now by the council. He says: "If it all goes to plan, Edinburgh gets a fabulous gallery. I love galleries. I think it is a win-win scenario. We want this to happen and it would be a fitting end to 40 years in Market Street for us."

However, Mr Chester's plan depends on The Fruitmarket raising the money required to expand and revamp its gallery. The revamp of the gallery, which over the years has held shows by artists such as Martin Creed, Phylidda Barlow, Jim Lambie, Louise Bourgeois, Christine Borland and Nathan Coley among others, will cost about £11m.

It is a difficult financial climate. Although the Fruitmarket has a little over £1m in capital funds from Creative Scotland, a large chunk of the funding will come from the Heritage Lottery Fund (HLF). This will be its second application for HLF funds, as the first was turned down earlier this year.

But if it succeeds, the gallery will, now it has been agreed with the council, expand next door to the building now occupied by Electric Circus and, the council hopes, create a "premiere cultural space" in the heart of the city. Mr Chester believes it is '95%' likely to happen: and he hopes it does.

But the building and expansion process is not likely to take place, even if funds are secured on time, for another two years. So until then, Mr Chester underlines, it is very much business as usual, as it has been since 1978, at Electric Circus.