Shaftesbury has won planning permission to redevelop a 2 acre derelict island site near Leicester Square into a mini-Covent Garden worth up to £250m.

The Longmartin development will be on a site between Long Acre, St Martin’s Lane and Mercer Street, and will feature shops, offices, restaurants and at least 20 flats around a new piazza.

An NCP car park at the site will disappear when construction begins later this year. The land is valued at £150m and it is owned by Shaftesbury and the Mercers Company.

The project is due to be completed in late 2009, and will have an estimated completion value of £250m.