An ending Dickens would have liked

For decades, Manchester has shamefully neglected its most celebrated novelist and social commentator, Elizabeth Cleghorn Gaskell. Even as her critical reputation was rising and Wives and Daughters and North and South were being serialised on television, her home city gave her the cold shoulder.

Now, it seems, it has finally seen the error of its ways. No 84 Plymouth Grove, the beautiful Greek Revival house she lived in with her family from 1850 to her death in 1865, is to be saved at a probable cost of £2.5m. Left to rot any longer, this 20-room neoclassical villa, now surrounded by sink estates and burnt-out cars, would have been lost for ever.

The philistine ignorance displayed by a range of bodies failing to appreciate the genius on their doorstep goes back to 1913. It was then, on the death of the last remaining Gaskell daughter, that the local authority had the chance to acquire it, but was quoted in The Manchester Guardian as saying: "The house belonged to one of the ugliest periods of architecture and was of no value beyond its association with the Gaskell family."

In 1969 the University of Manchester obtained it, converting it for use by the International Society. However, they relinquished it in 2000 despite the fact that it was a Grade II* listed building and on the English Heritage Buildings at Risk Register. More recently a potential backer, after being shown around, remarked: "She's not exactly Catherine Cookson, is she?" The Manchester Historic Buildings Trust acquired the house in 2004, and the long road to restoration was embarked upon.

The house is a historical gem which sparkles with the memory of visits by glittering literary and cultural figures of the day. Charles Dickens and his wife arrived unexpectedly at 10am one morning in 1852; far too early, as Elizabeth comments. He was already commissioning her to write for his periodical Household Words, but in her tetchy note do we see their relationship starting to sour? She later tired of his constant editorial demands, one of which was happier endings to her stories. Dickens once exclaimed to a sub-editor: "If I were Mr G, oh heaven how I would beat her!"

Gaskell was also a close friend (and the first biographer) of Charlotte Brontë, who stayed at the house three times. On one occasion she was too shy to greet the Gaskells' friends, so she hid behind the large curtains in the drawing room. Here, too, came John Ruskin, Harriet Beecher Stowe and the American writer Charles Eliot Norton. The conductor Charles Hallé lived nearby and taught piano to one of the four daughters. Elizabeth's husband, William, was a Unitarian minister, and he chaired welfare committee meetings there, as well as tutorials for the poor.

But Elizabeth's finely tuned socialist principles meant a crisis of conscience when it came to moving in. She wrote to a friend in April 1850: "We've got a house! ... And if I had neither conscience nor prudence I should be delighted, for it certainly is a beauty... You must come and see it and make me see... that it is right to spend so much ourselves on so purely a selfish thing as a house is, while so many are wanting - that's the haunting thought for me."

The rent, £150 a year, took half of William's salary. But she settled in, writing all but one of her novels there, finding whatever room she could while her husband used the best room as his study. And just as Byron, Shelley and Mary Shelley held a ghost story soirée in Italy, the result of which was Frankenstein, so Elizabeth hosted similar evenings, during which she and her guests relayed tales of horror.

They kept a pig, cow, chickens and ducks in the garden and produced their own bacon and butter. The good life was only slightly marred by her being "harassed by visitors" and by the frequent smell of paint as the landlord executed yet another redecoration.

The house, on three floors, was built speculatively in 1838, probably by the architect Richard Lane, as part of an estate for the emerging middle-classes. One of the most stunning features is the rectangular front porch containing columns carved with the lotus leaf shape, a design taken from the Tower of the Winds in Athens.

There is much work to be done. Structural cracks run through the walls, the foundations have to be underpinned, the whole roof replaced and dry rot eradicated, while the entire building must be restored and upgraded. Leaks from the roof this winter have added to the repair bill, to which, it is hoped, the Heritage Lottery Fund will donate £1m. English Heritage has offered funding, and altogether £400,000 has been promised from various sources.

The restoration may recreate three different eras: the original late Georgian phase; the High Victorian typical of Mrs Gaskell's 15-year occupation; and a Late Victorian decoration of 1890. The plan is to open the principal rooms on the ground floor to the public as a museum containing pieces of Gaskell's furniture, as a study centre and as a space for readings and performances.

The Heritage Lottery Fund has stipulated that part of the house should be set aside for community use: after-school clubs, literacy classes and so on. While this ruling may be seen by some purists as a departure from creating a Gaskell memorial, nevertheless it can be seen as being in the spirit of her own philanthropic outlook. "I am sure she would have approved of the house being put to public use," said the Gaskell scholar Alan Shelston.

The Trust, The Gaskell Society, Friends of Plymouth Grove and Manchester City Council are all backing the project, alongside English Heritage. "We hope that we are now on our way," said Janet Allan, the chair of Manchester Historic Buildings Trust. "Manchester is finally realising what an important writer she is. We are confident her house can be saved as a fitting memorial."