After years of neglect, the future finally looked bright for Brighton's historic Aquarium Terraces. But that was four years ago.

The development was meant to become a glorious centrepiece of Brighton's thriving nightlife.

Instead, four years behind schedule and still largely sealed off by metal barricades, it threatens to become the city's own Millennium Dome-style white elephant.

The latest setback to the seafront scheme came last week when magistrates vetoed a late licence for nightclub giant Po Na Na.

The firm was ready to invest £1.5 million to refurbish the two-storey building as a 1,000-capacity club.

But magistrates refused to allow a licence until 2am.

When ambitious proposals and drawings were unveiled four years ago, property firm Compco promised 50,000sqft filled with high-class cafes, bars and restaurants.

So far only three outlets have opened - a Jim Thompson's Oriental restaurant, a Burger King and a Sega World amusement arcade.

Visitors are still blocked from walking along parts of the terraces and the seafront view is obscured by the roof of the building, east of the Palace Pier.

Where the welcoming lights of bars and restaurants should have been there are signs pleading with businesses to contact property agents Stiles Harold Williams.

Alan Bond, chairman of the St James's Street Action Group, said: "The whole vision for the development has gone down the pan. It's beginning to look like a white elephant.

"Bearing in mind what was promised, a burger bar and an amusement arcade just don't measure up.

"In the light of the latest decision on the club, who will want to go to the expense of refurbishing this vast empty space?

"It's two floors underground, with no windows, so you can't really turn it into a retail area or restaurants."

The Jim Thompson's restaurant opened in April last year but manager Charles Laos believes they have missed out on much of the trade they were expecting.

He said: "Our business has gradually increased through word of mouth. But I'm sad there haven't been more outlets opening, which would attract more people.

"The building's an empty shell. Any business coming here will have to be a large corporate company, to afford the high rents.

"The landlords will have to spend some money and refurbish the shops themselves. That's the only way they're going to lease them."

Jason Papanicola, owner of Volks Bar and Club next to the terraces, said: "The design was wrong from the start. It's too commercialised.

"The place now looks like another West Street - which brings problems.

"The owners have had four years to attract businesses. You'd think they'd have had more success or at least changed their approach."

John Lighton, owner of The Brighton Angler fishing shop next door, fears a nightclub would only bring more disturbances.

He said: "I already have to spend my mornings cleaning up where people have urinated and defecated outside the shop the night before.

"There are already too many bars and clubs in Brighton. I wouldn't mind good restaurants here but the plans seem in chaos."

The terraces between Marina Parade and Madeira Drive were first laid out in 1869 and suffered from years of neglect.

The only attractions were deserted fairground rides, an amusement arcade and a go-kart track.

The renovation scheme, announced in January 1998, promised seven restaurant/bars and a huge pub, with outdoor seating offering sea views.

Compco said the new buildings would open by summer 1999 but the deadline passed without progress.

In August 2000, Andy Morrish, retail director of Stiles Harold Williams, said the Terraces would not open until Easter 2001 because not enough tenants had been found.

Firms rumoured to be interested included the Slug and Lettuce chain of pubs and Dixneuf, a French-style jazz cafe.

But Compco chief executive Nigel Ross admitted last year that finding tenants was taking longer than expected.

One of Europe's biggest nightclubs, the Liverpool-based Cream, had wanted to open at the terraces.

Brighton and Hove City Council approved a nightclub but restricted its capacity to 902.

A public inquiry in March 2000 gave the go-ahead for up to 1,750 clubbers but Cream's interest in the site has faded.

Police opposed the Po Na Na bid for a 2am licence but were willing to accept 1am.

But Steve Thick, project manager for Po Na Na, told the hearing he needed the later licence to compete with other clubs.

Brighton magistrates then decided to refuse the application, after hearing residents' fears of rising crime and noise nuisance.

After the verdict last Thursday, Mr Thick said the firm would review its plans over the next few weeks.

Councillor Andy Durr, responsible for the council's seafront development initiative, regrets the way the Terraces project has deteriorated.

He said: "It's very disappointing there hasn't been a better take-up of space.

"It's a private site, with a 100-year lease, so there's nothing the council can do. It's up to the developers."

Compco and Stiles Harold Williams said they were unable to comment.