Developers are spending £1.3 million turning old storerooms into ultramodern living quarters.

Integra and Karis, the company behind the King Alfred project at Hove, is converting the storerooms in Orange Row, Brighton, into 13 pods, small self-contained units for young professionals to live and work in and costing between £180,000 and £250,000.

The road will also be laid with new cobbles and there will be street lamps made by local craftspeople.

The developers hope to transform the backstreet into a "stylish London-esque mews".

Joe McNulty, managing director of Integra, said: "This sort of project can be tricky as we are effectively building 13 houses in a very tight space.

"However we have a very experienced team who see these small inconveniences as exciting challenges.

"We are very excited about seeing this once-neglected street restored into a buzzing environment for small business and artists."

The Brighton and Hove Local Plan says planning permission should be granted for the conversion of former industrial premises into live-work units, as long as their size and design is suitable for light industrial use.

But residents claimed the scheme was not one created with local residents in mind.

Barry Leigh, planning spokesman of the North Laine Community Association, said:

"These are so small that no one is realistically going to be able to use them for industrial work.

"The live-work unit title is just a way of getting around the local plan.

"No artist is ever going to be able to afford to live in one of these.

"The only people that might work in them are people like estate agents or dentists not the kind of industrial work or small entrepreneurs the local plan is trying to encourage.

"It is just gentrifying the area to make something attractive to Londoners, not something suitable for local people."

The dilapidated garages and storerooms being converted date back to the 1860s.

They are not considered to be of great architectural merit but are of historical interest.

The narrow alley of Orange Row is all that is left of what was once one of Brighton's poorest areas with some of the town's worst housing and more than 1,000 inhabitants.

Residents were mostly fishermen and it was not uncommon in the 1850s to see young girls walking around naked because of the poverty of their families.

Developers said Orange Row would be transformed when the development was completed in September.

All the open-plan pods would have broadband internet connections, electric heating and stylish interiors.

The live-work units vary in size from 350 to 800sq ft.

Karis spokeswoman Heather James said: "The development will regenerate this area from a run-down road into a gorgeous and inviting area that will enhance the North Laine."