Plans are afoot to transform Paddy's Market, the crime-ridden Glasgow landmark, into an international tourist attraction.

The rundown site near the Merchant City, which is nearly 200 years old, could become a smaller version of Camden Market, London's most popular open-air market.

Councillors want the market, which has been associated with illegal trading and drug dealing, to be replaced by aspiring artists and say some existing traders will also be welcomed, provided they behave responsibly.

Discussions are now at an advanced stage to allow Glasgow City Council to take over the lease from site owners Network Rail. Once complete, the local authority is expected to clear the site in Shipbank Lane, before re-housing the area with council offices and sub-let property to arts and business organisations.

News of the revamp provoked a mixed reaction among traders yesterday. One stallholder, Carol Salvona, said: "Glasgow should not forget who voted Labour in. These are working class people here, who don't have big fancy expense sheets."

Another stallholder, Hazel McGeachin, added: "If they make this an upperclass market, there's no way the drug dealing will stop. The drugs are just an excuse for closing it. We know the market is still needed because people come here in their hordes."

But others, speaking anonymously, welcomed the news. "This place should have been cleared up years ago," said one. "Everyone knows who the drug dealers are, but nothing gets done. We're here trying to scrape together a couple of bob, while they're walking around making a fortune."

Another agreed, adding: "It used to be a great place with a great atmosphere, but it's gone right downhill."

Organised criminals are known to operate out of the market. Critics claim problems are also aggravated by the presence of drug addicts living in an adjacent hostel. Nearly 850 crimes were reported in the area in 2005/6, mostly for drug possession, but including one attempted murder.

The local authority's regeneration convener, councillor George Ryan, said of the plans: "We will be able to lift the whole area. What we want is to create a mini-Camden Market. We see this as a tourist destination, an arts and crafts market and a cultural venue."

Councillor Gordon Matheson added: "The community I represent has suffered for long enough and Glasgow as a whole can no longer tolerate what I have described as a crime-ridden midden'."

The cost of addressing all the problems in the area was put last year at £277,000.