WORK has started on a £5.5 million building project that will complete a development widely seen as the engine room of York's economy.

The information technology centre at York Science Park is expected to attract 54 new companies, creating more than 300 jobs.

Alongside the Park's Innovation Centre and Bio-Incubator, the centre will be the final piece in a development which has provided more than 1,000 jobs.

The development has also pumped millions of pounds into the city's economy.

York Science Park chairman Professor Tony Robards said the site was becoming a development of national importance with a fast-spreading reputation for excellence.

Prof Robards said: "The three centres and the surrounding businesses really are a powerhouse, driving the York economy with start-up companies and jobs."

The new facility is being built with investment from Yorkshire Forward (£1.35 million), Highstone Estates (£4.5 million) - owned by Yorkshire businessman Paul Sykes - and the University of York.

The 25,000 square foot centre will provide facilities to nurture fledgling businesses, including appropriate accommodation, business support and hi-tech equipment.

Work will be completed by next summer and investors expect it to be running to capacity by 2006.

The facility will be managed by the Innovation Centre and tenants are expected to include web and software developers as well as telecommunications and university spin-off companies.

Jim Farmery, of Yorkshire Forward, said the York IT Centre was one of the group's key property projects. He said: "It has the added benefit of capturing the university spin-offs we are keen to encourage in our region."

Paul Sykes said: "The dot com bubble may have burst, but IT, technical innovation and internet developments are here to stay.

"If Britain is to retain a lead in the new global world we face, we must nurture the hi-tech businesses of the future. Today's digital industries are as exciting and as momentous as the Industrial Revolution was in its day."

Anna Rooke, of City of York Council, said York had a growing "e-friendly" reputation thanks to Science City York's successful efforts to secure broadband investment in the city.

She said: "The centre will be a tremendous asset in supporting York's burgeoning hi-technology community, which already employs over 9,000 people."

She said: "The IT Centre will be an important part of expanding York's support provision for nurturing new IT firms and creating new jobs for the York economy."

Updated: 11:41 Wednesday, November 13, 2002