By Daniel Hunter

Admiralty Arch is to become a luxury hotel after the government agreed to lease it out for £60 million.

The historic central London landmark, which is the ceremonial gateway between Trafalgar Square and The Mall, has been leased for 99 years to development company Prime Investors Capital (PIC).

Cabinet Office minister Francis Maude said the government had secured a "good price" for the building and dismissed claims it would become the preserve of the super rich.

"It is not the preserve of anyone at the moment and it won't be," he said.

"The bars and restaurants will be open to the public.

"We think the price is a good price, a fair price."

PIC plan to transform the arch into a five star 100-bedroom hotel with ballroom, spa and fine dining restaurant.

"We anticipate the number of people will be between 40,000 and 50,000 guests a year and we hope it will attract another 50,000 visitors," Spanish investor Rafael Serrano said.

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