SQUATTERS at a disused former York hotel claim attempts to evict them are "illegal".

A firm representing the White Swan Hotel's London-based owner has begun legal proceedings to regain possession of the property in Piccadilly.

It has posted a notice on the widow stating the building was "decrepit and uninhabitable and cannot be occupied as it is unsafe".

But the squatters say that legal papers submitted on behalf of the owners are based on a statement from the man who was responsible for the building's security.

He states that he found the building locked, unoccupied and undamaged at 8am on Thursday, April 17, but that shortly afterwards he noticed a break-in via a back window.

But squatter John Jacoby said they entered through the unlocked front door at 8pm the night before and that "absolutely no damage was caused".

He said: "We were in the building the night before and have many witnesses.

"In any case, it wouldn't be possible to get in via the back. All the windows were, and still are, securely boarded up and they're covered by CCTV."

Two dozen people, aged between two and 40, entered the premises and declared it open as a "rainbow peace hotel".

The property, which has been empty since its closure in 1982, is owned by the London-based Graham Family Settled Estates Ltd, which controls a £9 million property portfolio, including a share in the prestigious United University Club in Pall Mall, London.

The squatters say they have been clearing out rubbish from the hotel, including a large number of cans and bottles.

"It looks as if someone has been using part of the building as a den for heavy drinking," Mr Jacoby said.

"It needs a really thorough clean and then we'll paint it white.

"The dark green paint is peeling badly. If it's not sorted out soon, the wood will rot."

Michael Wood, a partner of Bircham Dyson Bell, who posted the eviction notice on behalf of the owners, today declined to comment.

Updated: 11:23 Monday, April 28, 2003