A near £1bn plan to turn one of Scotland's worst eyesores into the hub of a vibrant new district was unveiled yesterday.

The plans would see the St James Centre in Edinburgh transformed from an ugly 1960s concrete shopping mall into the lynchpin of an ambitious new city quarter with retailers, hotels, apartments and offices.

Public squares and rooftop gardens would also be a key feature of the scheme which is said to be the largest redevelopment in Edinburgh's city centre for half a century.

Thousands of new jobs are expected to be created through the development, which would treble the existing amount of retail space at the centre and open up links with Princes Street, George Street and new designer area Multrees Walk.

It is intended to put the capital firmly back on the map as a top retail centre, boosting its standing against rivals Glasgow and Manchester.

Designed by leading city firm Allan Murray Architects, the £850m proposals are based around a modern three-storey galleria modelled on the city's famous Baroque-style crescents as well as similar developments in cities such as Milan.

The plans were revealed for the first time yesterday by owners Henderson Global Investors at the launch of an exhibition in the existing centre on Leith Street as part of an eight-week consultation period.

Allan Murray described the ideas, which will see the entire complex, except the John Lewis building, torn down after nearly 40 years.

He said: "The time has come for us to put the St James Centre back into the heart of the city centre strategy and take its place as the pre-eminent retail environment, reinforcing the historic core of the city centre. It is about good solid city-making."

He added: "It will be a new quarter, opening up the east side of Edinburgh to create a place that people want to live, work and come and spend time in."

As well as two "decent-sized" hotels, the plans will include around 100-150 apartments, mostly luxury, and some 90 shopping units from boutique to large high street chain or international retail size.

The galleria will feature a "covered street" design allowing shoppers to be in the open air but remain sheltered from bad weather.

Under the plans the quarter will include new pedestrian links widening out access in the east side of the city to co-ordinate with the future tram system. One of the hotels could be built near St Mary's Cathedral, which is also within the area which the quarter will cover.

A development brief on the proposal has already received support from Edinburgh City Council, which is due to receive an application for outline planning permission from the developers in April following the current public consultation.

Chris Pyne, senior portfolio manager at Henderson, was confident that it would attract key shops to the city, with the firm predicting that, if given the go-ahead, demolition could begin in 2010 with the quarter completed in 2015.

He said: "An enormous number of retailers are not represented in Edinburgh because there is nowhere for them to go.

"The new St James Centre will give a real shot in the arm to retail with space for a range of different retailers."