Mills and boom: Rediscovering the romance of Lowry's Manchester

The granite spiral steps have been worn down by generations of workers. Raindrops tinkle as they hit the modern glass ceiling. Acres of exposed brick and thick iron columns mix a gritty industrial past with 21st-century chic.

This was once a grubby outdoor courtyard at Royal Mills, a complex of four Victorian spinning factories. Now it's the heart of a five-year, £85m redevelopment that could kick-start the revival of Ancoats, a run-down area of east Manchester sandwiched between the city centre and the site of a new supercasino.

These sleek, unique apartments, some with old wooden beams and cast-iron arches, were designed by Oliver Heath. They prove that city living need not be synonymous with flimsy, soulless newbuild.

So far, almost 200 have been put on the market. Spacious one-beds start at £150,000, and a canal-view duplex with three bedrooms and two bathrooms goes for £345,000. Around a quarter are still available.

Once complete, the site, which has two new blocks, will feature another 100 apartments, with retail units, a business centre and cafés occupying the lower floors. Apartments are limited to two per buyer, to keep renting to a minimum.

The project was a challenge. Four decades of dereliction and vandalism meant that ceilings and walls had collapsed and rain had seeped in. The mills are listed, so the team had to operate within strict parameters, and avoid unnecessary changes.

"This seemed like a hopeless case," says the project's architect, Steve Quicke, who works for FSP Architects and Planners, the practice that worked on Liverpool's Albert Dock and Castlefield, another canalside industrial zone in Manchester. "The mills had become more of a liability than an asset to the owners, and to the Ancoats area as a whole.

"Any other building in this state would have been pulled down, because conversion would be too expensive, but this was saved by its protected status and the [public] funding which this made available.

"The listed status meant we made to keep the style. But the original structure of these buildings - and adaptations made along the way - gave it a character we sought to emphasise."

Manchester's fortunes can be charted through its mills. A symbol of the city's domination of world textile markets in the 19th century, they stood neglected when the industry declined 100 years later.

None is more iconic than Royal Mill, one of the very earliest. Ancoats was the first industrial suburb of Manchester. Its looming mills, smoking chimney stacks and cloth-capped factory workers were immortalised by L S Lowry. But when the cotton trade crashed, the community went into tailspin, with crippling unemployment and social problems.

From 1818 to 1960, the site was home to McConnel & Kennedy - then the biggest fine-yarn spinners in the world. It has been awarded Grade II*-listed status and forms part of an urban conservation area.

On the other side of the canal, failing 1970s social housing is being cleared and replaced and a new canal, health clinic and school are being built. People involved in the overhaul of Ancoats hope it will secure east Manchester's bid for World Heritage Status.

In the first instance, ING Real Estate secured £8.8m of public funding from the Northwest Regional Development Agency and the European Union. This, plus almost as much cash as it cost to build the City of Manchester Stadium.

Those involved say that cutting-edge engineering, design and materials must be used if historical renovations are to be a success. The original features of the Old and New Sedgewick Mills - the two buildings finished so far - were turned into focal points, but the team were not afraid to innovate, where possible. The £1m atrium, which sweeps upwards from the second to the fourth floor, shines new light into a previously gloomy exterior courtyard.

The ground floor walkways were also enclosed and consultants were brought in to ensure that the apartments and units were well soundproofed. Along with sensitive preservation, small touches make a difference. Bits of machinery recovered from the mills have been turned into ornamentation. Plants from a opportunistic roof garden, which sprung up on the fifth floor after a ceiling caved in, have been replanted in the atrium and other public spaces.

The industrial archaeologist Steve Little, who was employed to advise on the development, believes that Royal Mills succeeds where other projects failed. He cites the former Haçienda nightclub in the city centre as a glaring missed opportunity. "It was the first nightclub as we now know them and as such an important part of Manchester's history," he says. "There were attempts to get it listed, yet the developer simply knocked down the original building and rebuilt it for flats. Future generations will want to know why that was allowed to happen.

"With Royal Mills, however, I think the original engineers would approve of what has been done. Victorians liked to use modern engineering methods. History is not static. It is vital that we protect our cultural assets, but history is not just about the past. It also concerns the moment which is happening and the moment which is going to happen."

www.royalmills.co.uk