A NORTH Yorkshire businessman has vowed to carry on with his dream of turning his restaurant into exclusive new homes by going back to the "drawing board".

Leo Campagna, owner of Da Mario's Restaurant in Knaresborough, has been at loggerheads with local campaigners opposed to his plans for the last three years.

Then last week an inspector refused Mr Campagna's plans for the site on Waterside near the Knaresborough Viaduct, following an appeal he lodged against their rejection by Harrogate Borough Council.

Mr Campagna said: "I was very upset at this setback at first, but now I have thought about it all, I have realised there is a way forward, and that is back to the drawing board." Mr Campagna's plans involved the demolition of his 19th century cottage and restaurant and the building of eight new homes on the site. But Mr Campagna believes the housing was the sticking point.

He said: "The planning inspector has agreed that the site is not a very valuable contribution to the landscape of the Waterside, the place is a mishmash of many different styles.

"The report said it was the designs that were unsuitable. He has not told me what I have to do to get the plans passed, but I think he has given me a big hint."

Harrogate Borough Council officials who recommended refusing the plans and opposed them at the public inquiry were open-minded about this new approach.

Planning officer Neville Watson said: "We will have to review any new proposals made by Mr Campagna in the light of the inspector's decision.

"Now it is down to him to go back to his advisers or architects, and sit down and look at the decision and see what was wrong, and see what he can do now."

Knaresborough Action Group Chairman David Rance said: "We said all along we are not objecting to all developments, it was the size and the scale of the plans we did not want.

"We would really recommend now that Mr Campagna takes a more consultative way forward, talking to both the council and the action group about what is the best way forward."

Updated: 11:43 Thursday, March 27, 2003