Building work has finally begun on the Silver Arcade – more than a decade since it closed.

Developers started work two weeks ago installing lifts and toilets to the grade II-listed building, which is expected to open for summer 2012.

They hope to restore the four-storey Victorian shopping arcade to its former glory in a £3 million scheme.

It will feature small independent shops and boutique stores.

Caroline Simpson-Watkinson, director of Harborough London Ltd, agent for the owner Lukegate Ltd, said: "Work began just a couple of weeks ago. It is going to take some time to complete.

"Because of its historical importance, everything must be replaced or repaired in an authentic way.

"It's not easy to get stuff made the exact same as the originals but it is going to look completely authentic when it's done."

Silver Arcade, in Silver Street, was once home to 64 small independent retailers, but the upper floors of the building were closed and shop fronts boarded up in 2000, despite a petition signed by almost 1,000 people.

The revamp includes the creation of a restaurant and bar on the top floor, a demonstration kitchen in the basement and space for different sized shops on the ground, first and second floors.

Traders once based in the arcade were overjoyed at the news.

Peter Turner, owner of Well Gosh clothes shop, in High Street, said: "We were evicted about 12 years ago and ever since I've thought the Silver Arcade had the potential to be the jewel in Leicester's crown.

"I am really happy to hear it's going to be up and running again soon. It's about time.

"I hope to see it filled with quirky little start-up businesses."

Retro clothes shop Wardrobe, now in Royal Arcade, used to be on an upper floor of Silver Arcade.

Shop assistant Sophie Garram said: "The staff and our customers always talk about it so it's amazing to hear it's going to be used again."

Stage two of the refurbishment, due to begin in a few months, involves the installation of customer lifts and the opening of shop units.

In about 12 months, restoration of shop fronts and metal balustrades will begin.

City centre director Sarah Harrison, said: "This is great news for Leicester.

"Silver Arcade has always been in the hearts of the people of Leicester and it's fantastic to hear it's going to be used again."

Paul Towey, 26, an employment adviser from the West End, said: "I've heard from friends that it used to be great so I'm really happy to know it's going to be open again.

"I'd like to see some record shops, cafes and vintage clothes shops in there."

Susan Knox, 53, from Evington, said: "I shop around there so I think it would be great.

"Of course, it's all going to be money dependent, but I think artists' workshops would be good in the arcade."

Developers have not yet begun the search for potential businesses to fill Silver Arcade units.

Anyone interested should call Caroline Simpson-Watkinson, director of Harborough London Ltd on 07834035601.