PLANS to open a budget hotel near Bolton town centre have been put on hold – and the building is now set to house 120 primary school pupils.

But a councillor will tell colleagues at a meeting tomorrow that the Ashton House building in Waterloo Street is ‘wholly unfit’ for use as a primary school.

Businessman Tom Ashton had plans approved to transform the former office building into an 80-bed budget hotel earlier this year.

But he said interest in the project from major hotel chains dropped in the build-up to the EU referendum vote in June, with companies fearful of unstable economic conditions.

After continuing to lose money on the property, which was formerly used as offices by the Royal Bank of Scotland, he has struck a deal with the Tauheedul Education Trust, which will now use the building for up to three years as a temporary home for its Olive School — a new primary school it plans to build in the borough.

From September, 120 primary age pupils will be taught inside the Ashton House building — with the trust currently making alterations to the inside of the building.

The Secretary of State for Education has approved the establishment of the new primary school at Ashton House.

But in a motion to be heard at the full council meeting, Crompton councillor Bilkis Ismail will describe the location as ‘wholly unfit’ for housing a primary school.

Her motion will ask for the council to seek advice on whether it can remove what are known as permitted development rights for state-funded schools, which mean the Government can approve plans to open schools despite objections from local councils.

The motion states: “In contravention of the objections raised by Bolton Council’s planning and highways officers, the Secretary of State for Education has approved the establishment of a primary school at Ashton House fronting the A666 St Peter’s Way, a location which is wholly unfit to house a primary school.”

A spokesman for the Trust has insisted that the health and safety of its pupils is its “utmost priority” and said it is “ensuring that the building provides a high quality learning environment for pupils.”

The trust is yet to decide on where it will build the permanent Olive School, having already built and opened the Eden Boys School in Wolfenden Street.

The Olive School will eventually become a 420 place Muslim faith based primary school, which will welcome children from all faiths and none.

Next month 60 children will be admitted into reception at the Ashton House site and 60 into Year One.

The school will welcome another 60 children into Reception each September and will reach its full size in 2021.

A spokesman said: “We are looking forward to welcoming our first cohort of pupils to the new Olive School, which will deliver high quality education to pupils in Bolton.

“The school will be at the centre of the local community and we’re looking forward to meeting and working with our neighbours in the coming weeks and months.

“As a Trust, all our schools that have been inspected while sponsored by TET have been rated Outstanding by Ofsted, and we achieve some of the best results in the country.

“We hope to complement the existing provision in Bolton, and ensure young people in the area enjoy the very best education.”

Mr Ashton, a prominent local businessman who now lives on the Isle of Man, said he has not given up on his plan to turn the building into a hotel.

He said: “The hotel is the ultimate aim but I had to do this because I was losing so much money on the building in rates and insurance.

“The Brexit debates got very nasty towards the end and it changed things for us.”

“It is the first time in 50 years that I have made a loss, so I had no choice but to make a commercial decision and agree a deal with the trust.”

He added: “It is a three-year deal and the money will give me a chance to once again fight to make the hotel dream a reality.”