A MULTI-MILLION development will create a "gateway" to Newport and act as a catalyst for further regeneration, say city bosses.

Construction work on the £5 million office block, funded by Bailey Developments, is due to begin in George Street next month after planners gave the go-ahead for the 30,000 sq ft building.

The three-storey building, on a 4.6 acre site set aside as a major new business district for the city, was initiated by Newport Unlimited and the city council.

David Ward, director of planning and strategy at Newport Unlimited, said the development is important for Newport because of the part it plays in wider regeneration plans for the city.

He said: "This is a significant step forward for us. This scheme will act as the all important catalyst to encourage further new development activity in the next few years."

Work is expected to begin next month and is due to be completed by mid-2006.

It will provide high quality accommodation and could provide offices ranging upwards from around 5,000 sq ft.

It will include fully accessible raised floors, a heating and cooling system, passenger lifts and on site car parking.

A new magistrates court and the regional headquarters of the Red Cross, as well as another major speculative office development, will also be located on the site.

The George Street offices, which will be a gateway project, are just one of the 60 developments in 15 priority areas that Newport Unlimited will be helping to set up in the next five years, in line with its large-scale regeneration plans.

Councillor Erryl Heath, cabinet member for development and employment, said Newport is growing rapidly as a recognised centre of business.

She said: "It is important that we provide both local and national companies with good quality options when it comes to business accommodation.

"This development promises to be the first step in providing new, top-class facilities."

Newport Unlimited, Wales's first urban regeneration company, was founded by the Welsh Assembly administration, Welsh Development Agency and Newport city council in 2003 following steel cut backs.