Bristol Grosvenor Hotel developers investigated

Work on Bristol's Grosvenor Hotel should have been completed by September 2017 but was never carried out

A property developer which failed to turn a derelict hotel into student flats before going bust is being investigated by a government agency.

Work on Bristol's Grosvenor Hotel should have been completed by September 2017 but was never carried out.

Some investors sank about £50,000 each into the project, having been told to expect good returns on their money.

Grosvenor Property Developers has gone into liquidation and is being investigated by the Insolvency Service.

The firm did not respond to a request for comment, but has previously denied any wrongdoing.

It is unclear why work did not begin on the project, but the developer previously blamed ongoing road works in the nearby area around Temple Meads railway station.

The "high-spec" self-contained student studios were marketed at £99,000.

Angry investors had threatened legal action if their money was not returned.

A spokesman for the official receiver, working on behalf of the Insolvency Service, said: "As liquidator of the company, the official receiver has a duty to realise the assets of the company while investigating the causes of failure and the conduct of all individuals involved in the management of the company."

Bristol City Council wants to compulsory purchase the building if negotiations with its owner Earlcloud Ltd fail.