HOTEL bosses will invest £1.1 million into the Last Drop Village as they continue to search for a buyer.

The four-star hotel will be upgraded over the next three years with work set to be carried out on all 128 bedrooms, the restaurant and famous Steakhouse and Teashop.

The move follows a number of improvements to the hotel over the past 12 years which have included a hydro spa and full leisure facilities, a 600-seater self-contained function room, the Pennine Suite and the building of 42 new bedrooms.

The Last Drop was put up for sale in October and was expected to fetch more than £20 million.

Owner Macdonald Hotels has received a number of offers for the Last Drop but it has rejected them all after a number of financial institutions have shown interest in the property.

As an alternative to selling outright, the company now says finance backing is 'the preferred solution', with the investor taking control of the business.

It would allow the hotel group to retain the management of the property on a long-term basis, under the Macdonald name.

The £1.1million investment will maintain the hotels four-star standards.

Work will be carried out in phases starting with upgrades to the restaurant, cocktail bar, banqueting suites and the Steakhouse and Teashop.

Donald Macdonald, executive chairman of Macdonald Hotels, said: "The Macdonald Last Drop is an exceptional hotel and it's been our great privilege to own this famous landmark for the past 12 years.

"Our general manager, Gerry McGee, has succeeded to build on the hotels impressive reputation, locally and nationally, instilling the core Macdonald values for people, standards and service with our staff.

"The possibility of a new owner for the hotel may have caused uncertainty in some quarters, but I would like to offer the reassurance that nothing will change after any sale as we will continue to manage the hotel to this standard, ensuring continuity for both guests and staff.

"But, in the meantime, we will be investing more than £1million to achieve the full potential this impressive property undoubtedly has.

"Its a new and exciting chapter for the Macdonald Last Drop Village Hotel & Spa and we are delighted with the prospect that, by selling to a financial institution, we can guarantee our involvement here for many years to come."

The Last Drop originally opened in the late 1960s. The business has expanded dramatically since Macdonald bought the site in 1993 and, in addition to the main hotel and fitness centre, has a shopping street with village tea shop, a steakhouse, hairdressers, book store, florist and toy shop.

It now has a turnover of £6 million per year.

There are 200 staff at the complex, who are employed on a full-time, part-time and seasonal basis.