PLANS are being drawn up to build a major new upmarket shopping arcade opposite Carfax Tower.

The multi-million-pound retail development would be created on a large site behind the city's main Post Office, which would be retained along with other buildings facing on to St Aldate's.

And the city council says the scheme would significantly add to Oxford as a shopping centre, perfectly complementing the £300m redevelopment of the nearby Westgate Centre.

There would be pedestrian routes to the new mall from St Aldate's, Queen Street and Pembroke Street.

The council hopes it might be similar in style to the Golden Cross, the arcade created almost 20 years ago linking Cornmarket and the Covered Market.

This site is identified in the Oxford Local Plan as offering "an opportunity to create a range of small shops and improve pedestrian links through the site".

The proposals now being drawn up include offices and a student housing scheme.

The site south of Queen Street has a complex pattern of land uses, including yards, offices, mini cabs and semi-derelict storage space. A large part of the area is owned by Merton College.

The London-based development group Carlyle Skelton has acquired a significant area of the site.

A company spokesman said: "We have acquired a variety of long-leasehold and freehold interests from Merton College and other landowners, with a view to creating a significant new retail office and student housing scheme.

"The high-quality scheme will open on to a new pedestrianised square. Oxford suffers from lack of modern retail space, for which there has been no new development for many years.

"The same can be said for student housing and, to a lesser extent, offices."

The city council's chief planning officer, Michael Crofton Briggs, said the developers were working up their designs and a planning application was expected in the early summer.

He said: "We see this as a proposal that would complement the Westgate redevelopment, rather than compete with it. When you look at the big area of land behind St Aldate's, there is not a lot of activity going on."

Existing occupiers of the site include Swarovski, Oxford City Council, Blacks Leisure, Henman Solicitors and the Post Office.

John Goddard, pictured, leader of Oxford City Council, said the frontage of the St Aldate's Chambers, used as a contact centre, would be retained. But he expected developers to improve council offices as part of the scheme.

Mr Goddard said: "I am sure this is something that will be welcomed by retailers and shoppers. I certainly hope it goes ahead. It will help bring about a good balance of large and small shops in the city centre, with a good proportion of local stores.

"There is a queue of retailers wanting to get into Oxford. At the moment Oxford is under-shopped, which is one of the reasons the rents are so high."