A FORMER Viking settlement in York that had been used as a drug den by heroin users was today being transformed into luxury flats.

The development, in Walmgate, is due to be completed in October and will see 20 one and two-bedroom flats built.

A huge crane was parked in the middle of Walmgate today, meaning motorists were being diverted along St Denys' Road.

Alan Roderick, site agent for contractors Stainforth, said the crane would be on site for two to three days, while floors were put in.

Another two to three visits by the crane are expected, he said.

An eyesore building on the corner of St Denys' Road and next to the site is a listed structure and will become part of the block of flats.

Piccadilly House, thought to have been last used as an electrical goods shop, has been derelict for some time, and is covered in fly-posters.

Mr Roderick said: "It looks in a bad way but just needs tidying up really. It will become flats, like the rest of it."

A spokeswoman for English Heritage said: "The building was listed at least ten years ago. It is a good late Georgian house with 15th-century timber frames recorded inside."

Last July, the Evening Press revealed how heroin users had been using outbuildings on the site to inject drugs.

Mr Roderick said 130 used syringes were found there when contractors moved in.

"Environmental health dealt with it very thoroughly. They cleared the needles and checked the site before any work began," he said.

Updated: 16:29 Thursday, April 04, 2002