Plans for a new £22m shopping scheme in the centre of Oxford are to be submitted to the city council next week.

Despite the prevailing economic conditions, private equity firm Carlyle Group is intending to push ahead with the major development behind Queen Street.

The scheme would create an open-air shopping centre running from St Aldate's Tavern archway to Queen Street, near Marks & Spencer.

Nine new shops would be created, with 17,000sq ft of office space, and accommodation for up to 96 students.

The application submission follows a consultation exercise with residents and businesses.

The two-phased project, which Carlyle said would regenerate a neglected part of the city centre, would initially involve a six- to eight-month refurbishment programme of existing buildings on St Aldate's, with Carlyle in discussions with the city council about taking this space.

In the second phase, existing council offices at St Aldate's Chambers would be demolished to make way for the new shops and offices.

The plans are expected to be considered by planners early next year, with construction likely to take two years.

Mark Harris, director and head of UK asset management at Carlyle, said: "We see this as an excellent opportunity to redevelop a prime part of the city centre and are committed to proceeding with these plans despite the current market conditions.

"Encouragingly, we have already seen considerable interest from potential tenants for this project.

"We have interest from the council with regard to their office requirements and are in advanced negotiations with two key potential anchor tenants for the retail space.

"The details of these plans have been carefully considered, taking account of a broad range of requirements.

"Given the strong local support that we have seen for the plans, we hope to be able to commence this exciting opportunity early next year."

With an entrance to the arcade in Queen Street, the development is likely to re-ignite calls for buses to be removed from Queen Street.

Ed Turner, deputy leader of the city council, said the proposals showed Oxford was still regarded as a powerful retail centre.

Richard Alden, chairman of Oxford Covered Market Association, said: "We don't know what kind of shops they will be, but I think the rental levels would preclude food traders. Our view is anything that helps Oxford as a shopping centre must be welcomed.

"There is now so much uncertainty with the Westgate development faltering."

Mr Alden added: "I'm sure the Westgate will eventually be done, but I would hate to think when. "