Hotel guests in Oxford could soon be enjoying a taste of luxury in former prison cells once occupied by murderers and thieves.

The city planning committee has approved a scheme to turn A-wing of the former Victorian jail in New Road into one of Britain's most unusual hotels.

Four cells will be knocked into one and windows enlarged to attract tourists and business people paying more than £100 a night.

Many of the prison features, including windows, doors, corridors and staircases, will be kept.

Backing for the 74-bed hotel will mean an end to the lucrative market of renting out the prison to film and TV companies which has netted the site owners, Oxfordshire County Council, nearly £500,000.

The £18m redevelopment, which also includes a roof garden, a 100-seat restaurant, shops and a leisure centre, has still to be approved by the city council. Parts of it remain controversial.

The planning committee is unhappy about a new building on the historic site and has ordered developers, the Osborne Group, to re-design it.

The two-storey building, housing an underground car park, restaurant and hotel rooms, has been criticised because it would overshadow the Mound, one of the few remaining parts of Oxford Castle dating from 1071.

A heritage site based on St George's Tower, another feature of the castle, is also planned.

But the committee imposed a condition that there should be no commercial activity until the heritage centre is open. The development was criticised for placing too much emphasis on commercial activity.

The planning committee chairman, John Goddard, said: "This is the first opportunity since Victorian times to get a decent view of the Castle Mound.

"Seeing the mound will remind people that there is history here and they will be tempted to go in. In an ideal world we would have no building there at all."

Lord Mayor Maureen Christian, who told the committee she was "bitterly disappointed" with the scheme, failed in an attempt to get it rejected outright.

She said: "This is the most exciting site that has been available in Oxford for generations. There is nothing in the application that tells us how the heritage will be maintained. It's all commercial development."

Planning committee vice-chairman Mike Woodin agreed that the new building was unwelcoming. But he warned: "If we are in favour of the principal development, we should exclude the bits we don't like, rather than refuse the whole thing."

Edwin Townsend-Coles, a former chairman of the Oxford Civic Society and a leading critic of the scheme, said the plans should still be rejected.

He said: "I think it is tragic to be handing over this historic site to commercial development."

County assistant director of environmental services Neil Monaghan said: "We are very pleased that the committee has decided to grant consent. We are a little disappointed that they want to see the New Road building redesigned. That is something we will look at."

The plan will now go before the full city council on June 12.