Torquil, who made millions when he sold his toy company Bluebird to Mattel, hopes to complete work in September 2004. Construction of the project, which has attracted significant funding from the Arts council, Heritage Lottery Fund and a number of private donors, will now start in the summer.

The toy millionaire founded the Norman Trust and in 1996 bought the Roundhouse for £6 million ($9.8 million). The ground level will become an auditorium again for contemporary music, festivals and possibly a "rock Proms". More recently, the Royal Shakespeare Company has been performing there.

But the focus of the attention of Torquil is a vast cavern, about the size of London's Albert Hall, beneath the auditorium and which has remained unused since the Roundhouse was a gin warehouse. The toy tycoon plans to convert this into workshop space for artists.

The businessman also plans to develop the car park into a cafe, the plant room for the whole complex, a 180-seat studio theatre, dressing rooms and a TV production studio. The land was originally bought 30 years for the development of a court house, but work never proceeded and the site has remained predominantly derelict.

The Roundhouse was originally developed in 1847 to house the turntable at the terminus of the London and Birmingham Railway, but 20 years later it was no longer needed for this and converted into a warehouse. In the 1960s it was listed because of its historic and architectural value and used as a performance venue. In the 1980s the company running the theatre went intno liquidation and only now is it set for a revival.