The Café Royal in Regent Street is to be turned into a 160-bedroom, six-star hotel by an Israeli property developer.

The plan by Alrov, run by Alfred Akirov, is part of The Crown Estate's regeneration of the area to the north-west of Piccadilly Circus, which also includes the Regent Palace Hotel and Quadrant Arcade. One of the most significant West End developments for decades, it also involves the pedestrianisation of scruffy Glasshouse Street.

According to Property Week, Alrov is close to agreeing a deal with The Crown Estate to develop and operate a hotel at Café Royal. It has been searching for schemes in European cities that have "strong tourism demand, landmark buildings in prime positions with a focus on six-star hotel category" - something the site certainly offers.

The Alrov hotel would be one of the grandest in London, and could charge as much as £1000 a night for the best rooms.

The Crown Estate, which looks after the Queen's land and property, is looking into floating part of its Regent Street portfolio.