RESTAURANT owner Clinton Pugh has failed in a bid to get the all-clear to demolish one of his restaurants and replace it with housing.

Mr Pugh, who wants to build three townhouses and six flats in place of The Lemon Tree, in Woodstock Road, has said he will appeal against the decision.

He is also considering launching another application for housing on the site.

But Mr Pugh reassured people that the restaurant, which is listed in the Good Food Guide, is still open for business at the moment.

He said: "It has got even harder now to stay open, but we are still open at the moment if people want to come along.

"I will keep it there as long as people want to come.

"But I cannot keep it open indefinitely if it's losing money."

Mr Pugh said he needed to take £25,000 a week just to break even, meaning the establishment is losing cash - £10,000 last week alone.

He said: "A lot of people are struggling because we are all going for the same market place so we are all cutting our costs.

"Most restaurants I know are charging less than they were before.

"I love The Lemon Tree, it's my favourite place but it's just not worth it any more because we have lost so much money.

"We have got fantastic staff, a great chef and a great team but after four years I know it is not going to work."

Mr Pugh has acquired The Old School pub, in Gloucester Green, and said he hoped to move much of the restaurant's equipment and staff to the new premises.

He said: "I will try to make sure everyone is looked after.

"It will not be exactly the same as The Lemon Tree, but there will be elements which are the same and it will be run to a similar kind of standard."

He would not give a closure date for The Lemon Tree but said it would continue to be run until he decided it was time to shut up shop for good.

It was likely this would happen before new planning permission for the site was obtained, he said.

Permission was refused by Oxford City Council's north area committee.

The Lemon Tree was opened 13 years ago by Mr Pugh but he sold it in 2000 to concentrate on his other venues, before buying it back four years ago.