Rock star steps into the fray as one more music icon in Liverpool faces bleak future

An unprepossessing 19th-century converted warehouse on Liverpool's Parr Street has long been the unlikely source of some of Britain's most memorable musical creations.

Coldplay, Simply Red, Sophie Ellis Bextor, Badly Drawn Boy, Dove, Bjork and New Order are a few of the superstars who have used the building's recording studios, which are the largest outside London. Three Grammy winners have been fashioned there by Coldplay's producer alone, and many a career launched.

Now, just as Liverpool prepares to become the 2008 European City of Culture, the city has learnt the studios are to close. A company part-owned by the veteran rock singer Phil Collins is to sell the building, for possible conversion into 47 apartments with shops, office and leisure facilities. The building is not paying its way and part of it is derelict, says the company, Hit and Run.

Liverpudlians, still mourning the closure 18 months ago of The Picket, another of their iconic venues, are distraught, none more so than Ian McCulloch, lead singer of Echo and the Bunnymen. He called it a "sad day for Liverpool" and said he was dismayed that "one of the city's most successful cultural assets is being closed to line the pockets of corporate property developers".

The Coldplay producer Ken Nelson, with whom the band recorded the album X&Y at Parr Street, said many artists were dismayed by the closure of the venue, a stopping-off point for many on the musical tour of the city which centres on the Cavern Club in Mathew Street. "I love to record in Liverpool in a studio which compares very well with any studio in the world," said Nelson.

Other musicians who have used the three-studio complex in the past 12 years include Diana Ross, the Beautiful South, Teenage Fanclub, Barry Manilow, Howard Jones and OMD.

Parr Street has been credited with helping to resurrect north-west England's recording scene after the closure of the Strawberry studios in Manchester. The former Factory record label boss Anthony Wilson said its closure was a disaster for many prospective bands. "Parr Street was a lifeline," he said. "Studios are a difficult business but it is sad it has come to this."

The building also houses several design and graphics companies and the popular 3345 Parr Street restaurant. Efforts have been made to buy out the owners. A consortium including the musician Thomas Lang, who runs 3345, and other local businessmen have been in negotiations with Hit and Run since January.

Their bid failed on Wednesday, just as they believed they were about to exchange contracts, and campaigners have now been told the doors to the studios will be closed from next Thursday.

A Liverpool councillor, Steve Munby, who has also campaigned to save the studios, said there were now thoughts of visiting Phil Collins' home, in Geneva, to protest. "It feels as though we have been strung along on this," he said. "This is a real gem for the city and to lose it would be a travesty." Hit and Run is co-owned by Collins and his former Genesis band members Mike Rutherford and Tony Banks. Parr Street is part of a £750m city-centre regeneration project by the Duke of Westminster. Planning permission for the apartments is expected to put up the asking price to £1.5m. The planning issue remains unresolved.

A spokesman for Hit and Run said: "We are looking for offers in the region of £1.6m and if the consortium wish to come back with a new offer, they are welcome to."