A £9 million proposal to transform a run-down market into a European-style arts and crafts centre is at the heart of plans to regenerate a down-at-heel shopping precinct.

Under the Open Market Traders' Association's plans, visitors would be able to watch craftspeople at work and an emphasis would be put on selling fresh and healthy, local produce.

The association has been given a year to come up with detailed designs and a business plan for the London Road fruit and vegetable market.

Draft proposals include 56 permanent market stalls, 58 arts and craft workshops, a caf and 26 one, two and three-bedroom flats, 40 per cent of which would be affordable housing.

The site, owned by Brighton and Hove City Council, would have 20 stalls for visiting farmers' markets and French markets and could also be used as a venue for street art and entertainment.

The plans also incorporate the London Road Co-op site, due to close in February 2007.

Traders feared the closure of the department store would sound the death knell for the shopping area, which has been in slow decline since the Sixties. It is hoped the scheme will be the first step towards major regeneration.

Paul Reynolds, who has run the Market Flower Shop for more than 15 years, said a revamp could bring the success enjoyed by the Borough Market in London.

Mr Reynolds, 55, said: "What the traders really want is some kind of reasonable assurance for their future.

"The Open Market is a bit tacky and it needs a good step-up. Doing something purely cosmetic would not be enough. The whole place has lapsed over the years and we need something to revitalise it."

But he said it was still early days, adding: "We have had things like this come up before but this is the most positive scheme. I think people are keeping quiet until they see the final proposals.

Personally I'm very excited about it." The traders' association would form a not-for-profit company to develop the market and look after the investment and running of the site. They intend to apply for loans and grants to fund the project.

Lomax, Cassidy, Edwards, the architects behind the award-winning Jubilee library, has produced initial designs.

Don Turner, the city council's lead member for regeneration, said: "There has been so much enthusiasm and I think they have come up with something outstanding. It's the first step to major regeneration of London Road and the Open Market and will change the complexion of that whole area."

The city council's policy and resources committee will consider the outline plans next Wednesday. If the scheme gets the green light a more detailed masterplan will be presented at a future meeting with a view to granting the traders' association a 125-year leas