GLASGOW School of Art is to spend up to £20million upgrading McLellan Galleries.

On Thursday, city councillors are expected to agree the Art School is granted a 95-year lease of the Sauchiehall Street premises at a rent of £1000 a year.

In recent years, the Galleries has only had short-term leases and at present is partially occupied by the Art School following the fire at the Mackintosh Library this summer.

Major refurbishment works will have to be carried out to bring the building to a condition where it could be occupied permanently.

Two years ago, a number of organisations approached the council to formally express interest in leasing the Galleries.

As a result, it was decided to carry out an open market exercise and the property was widely advertised in August and September this year.

However, only Glasgow School of Art came back with a formal bid by the closing date.

Feedback from the market suggested potential bidders did not appreciate the complexity of the building nor the need for substantial cash investment and as a result felt they were not in a position to submit a bid.

The bid from the Art School was checked by an evaluation panel and demonstrated the community benefits of its business case.

It also highlighted the recent experience of the Art School in delivering art, culture, public access and community benefits for the city.

The report states: "The evaluation panel's view was that the GSA proposal was robust, ambitious and deliverable and presented an exciting opportunity for the city centre and the Sauchiehall district in particular.

"If approved, it is anticipated GSA will make a significant capital investment of between £10m and £20 to enable the growth of GSA both in terms of students, staff numbers and research performance which will have a significant direct and indirect local economic benefit.

"The proposal also promoted the skills agenda through construction and restoration and the GSA proposal fully committed to maximising community and public benefits."

Councillors will be asked to agree the Art School should be given a 95-year lease of the building for a rent of £1000 a year.

The report says: "The council agreed any permanent tenant should be willing to take a long lease of the property so that a long-term financial commitment can be made to both repair and re-use the building in line with the historic uses that have focused on art, culture, public access and community benefit."

The original Mackintosh building was severely damaged by fire on May 23. The extent of the damage and the future of the building have still to be determined. An initial fire service estimate was that 90% of the building and 70% of its contents had been saved.

The fire, which began in the basement, quickly spread upwards and, although it was brought under control quite quickly, significant damage was done to the historic studios and stairways.

The renowned Mackintosh library was destroyed; the archive was water damaged, but can be air and freeze dried.

There were no reported casualties.