Barges to become Wharf homes and restaurants

The mixed-use scheme will feature two restaurant boats and three residential crafts. British Waterways - which is working with H20 Urban Ltd on the project - has confirmed South Dock is its "preferred location", but added no specific site has been decided as yet.

British Waterways development manager Nina Holgate said: "I wouldn't want to put a pin anywhere at the moment. But the key is to put this scheme in a location that is within walking distance of offices, so people can come down.

"Another option is Millwall Inner Dock, but is that too far away? We were also thinking about West India Dock, but because of the Crossrail development it would be difficult to get in and out.

"We need to make sure that the site remains a fully operational dock, and that will be the case wherever we put this particular project.

"This is a bit of a step into the unknown for us, so we're just trying to make sure we've thought of everything before we start."

London director Mark Bensted and Docklands manager Dennis Fink purchased the boats and had them taken to South Quay after realising their potential as the focus of a "water-borne commercial area".

BACA and PCKO have been selected as winners of the competition to design the scheme, which will take approximately 18 months to complete.

This time includes the year it would take to remodel the Spits Barges at a shipyard.

Ms Holgate claimed the project would encourage developers to make better use of the water.

She confirmed British Waterways was liaising with Tower Hamlets Council to find out whether planning permission was required.

The project will form part of a larger vision of a reinvigorated dock network, which has been devised by partners such as architect Sir Terry Farrell and Tower Hamlets Council.

The winning designs from the Barge project and other entrants are currently on display in a month-long exhibition running at New London Architecture, in the Building Centre, in Shore Street, until June 27.