PUBLIC cash WILL go to help double the size of Buchanan Galleries.

Glasgow City Council has today been given the go-ahead to spend around £55million to support the mall's expansion and – it hopes – unlock £310m in private investment.

The Scottish Government has formally backed the controversial Tax Increment Finance or TIF scheme for the shopping centre.

In doing so it set in motion the biggest changes to the city centre since Buchanan Street was pedestrianised 30 years ago.

Alex Neil MSP, left, the minister in charge of infrastructure, was today hugely upbeat about the scheme – known as the Buchanan Quarter TIF – which he called a £400m boost for the city.

He told The Evening Times: "This development will breathe new life into Glasgow, underlining its position as one of Europe's great, vibrant cities".

He added: "Not only will the Buchanan Quarter project unlock hundreds of millions of pounds of private investment and create hundreds of new jobs, it will also bring people flocking into the city centre to enjoy the new facilities."

The Buchanan Galleries expansion – and associated public realm works – is by far the biggest shopping and leisure development to get the go-ahead in the UK since the credit bubble burst four years ago.

It will see Buchanan Galleries – owned by property giants Land Securities and Henderson – expand dramatically, with new and bigger shops, restaurants and a cinema complex, all linked seamlessly with an upgraded Queen Street station and a renovated Concert Hall.

The council and the government believe the Galleries' expansion and all the related public realm work will create 1500 new jobs and cement Glasgow's status as Britain's biggest shopping destination bar London's West End.

This view is supported by major business lobbies, such the Scottish Chambers of Commerce, CBI Scotland and the Scottish Council for Development.

However, skeptics, including the owners of rival St Enoch centre and opposition city councillors, fear the expanded mall project will suck the life out of Glasgow's other traditional shopping drags, such as Sauchiehall and Argyle Streets.

Council bosses have dismissed such concerns.

But today it emerged that the Scottish Government is taking them seriously.

The Evening Times can reveal that Holyrood approval for the scheme comes with several conditions.

One of these is that the council must put in place an action plan to "maximise benefits" for other shopping areas. This is likely to include Sauchiehall Street, where rents have fallen by more than a third over the last five years.

Landlords on that street are increasingly whispering that speculation that big name retailers will flit to Buchanan Galleries is pushing down rents.

In response, Buchanan Galleries and its backers in the council have made a point of stressing that the businesses they hope to lure to the expanded mall are big US and other international brands currently unrepresented on Scottish high streets.

Some of the most prestigious names in retailing have been tipped as new anchor tenants for the new wing of the mall to be created from its current car park.

Under the TIF scheme the council will borrow a total of £80m, which they hope to pay back over the next 25 years from business rates generated by the mall.

Of this cash, £55m will be given to Buchanan Galleries to pay for what council bosses called "enabling infrastructure" and "public realm works" around the mall.

As previously revealed by The Evening Times, these include:

l A new giant glass atrium to be shared by the mall and the Concert Hall at the top of Buchanan Street.

l A £21m walkway to link the expanded shopping centre to a new car park in North Hanover Street and to Queen Street Station.

l Public realm works, including new public art.

Out of the borrowed £80m, the council will spend £25m on other 'goodies', including an upgrade for the Royal Concert Hall.

In order to go ahead with the scheme, the council now has to agree to the conditions set out by Mr Neil, including the action plan for other parts of the city centre.

The owners of St Enoch Centre have previously threatened to sue the Government to stop the TIF, arguing the scheme – and especially the proposed walkway – amounts to illegal state aid for their rival.

Such an action could delay the development, which is likely to begin next year.

IT has been hyped as Scotland's secret weapon to deliver private investment even as the economy falters.

In theory, Tax Increment Financing, or TIF, sees councils borrow to back commercial developments against the non-domestic rates they hope will be generated by such schemes.

Glasgow's proposals to give a leg up to the expansion of the Buchanan Galleries is only one of three or four pilot TIFs in Scotland. Like Glasgow's – which is at least a year behind schedule after an early council draft business plan was rejected – they have all had their problems.

Alex Neil today passionately defended the funding mechanism.

He said: "Despite Westminster's swingeing cuts to our budget, the Scottish Government has been resolute in its belief that investing in our infrastructure can help create jobs and stimulate growth in our economy.

"We want to encourage innovative funding models, such as TIF, to help lever in additional private sector investment."

In fact, Mr Neil estimates that just the TIF pilots in Glasgow, Ravenscraig, Edinburgh and Aberdeen could unlock £2.5billion of private investment. They will also, however, add 1% to Scotland's share of the UK national debt.

For Glasgow's TIF to work, the city has to make sure it has a net rise in non-domestic rates to pay back the loan. Otherwise, it will have to do so using cash that would otherwise be spent on core services, such as schools, social work or repairing potholes.

The business case for the scheme is based on predictions of growth in retail sales over the next 25 years. The council's "worst-case scenario" is that retail sales will grow by an average of 2.5% above inflation for the next quarter of a century. Experts say that is "bold".

The mall has argued that its investment would not provide its minimum level of return without the TIF but will not reveal how much profit it expects to make from the scheme.