The deal has been done, and Reigate's Old Town Hall will be given' to Caffe Nero.

The popular coffee chain will take out a 10-year lease on the Grade II* listed building, and use it rent free for the short-term, in return for the cost of refurbishment.

The lease will require Caffe Nero to refurbish the building to English Heritage standards as well as meet the requirements of the Disability Discrimination Act.

Reigate and Banstead Borough Council says the deal, which saves it around £580,000, is a "win-win situation".

Councillor Roger Newstead, executive member for local economy, said: "It will become a focal point and meeting point. It will increase the footfall in the centre of the town and that must be a benefit to local businesses."

He said it means the building will be brought into regular use, enable the public to have access to it, and the refurbishment will not cost the taxpayer a penny.

The Old Town Hall is more than 270 years old and was once the hub of the community. In recent years it has been left to deteriorate and costs £7,000 a year to keep.

In July 2002 the council launched a consultation to find out what people wanted - a popular choice was a museum or heritage centre. The more cost-effective' caf or restaurant option was fifth on the list and the decision was made behind closed doors.

Coun Newstead added: "It should ensure it is kept in good condition, because Caffe Nero has a commercial incentive. It should also encourage others in this town to smarten up their own act."

The decision, and Coun Newstead's remarks, have angered Wendy Eldershaw, Reigate Business Guild chairman.

Mrs Eldershaw has fought hard to bring the Old Town Hall back into use as a community facility. She said: "Those words really take the coffee biscuit. I hope they Caffe Nero look after it better than the borough council.

"The Old Town Hall symbolises activities that have been going on in this town for many years. It will be the changing face of Reigate. Bringing in the big boys will do no good to the small independents. It just goes to show the contempt that the small business is held in."

The council and Caffe Nero say they hope to display artists' work in the building - something Mrs Eldershaw dismissed as "lip service".

But Coun Newstead said you cannot please everybody. He explained: "We have to do essential things first, and then go down the route of what we say are nice to haves'. It the Old Town Hall is not essential. The town has survived without it."

Caffe Nero has a track record of restoration, including a Tudor building in Taunton, Somerset,which is now part of the company's chain of coffee shops.

In Reigate the undercroft of the Old Town Hall at street level will be partially enclosed with glass walls to provide an indoor seating area, a lift will be installed to the first floor and the existing staircase refurbished.

Ben Price, Caffe Nero's financial director, said: "Reigate is a good strong town, very strong for our type of customers. We're always looking for attractive and interesting buildings to use and we are very happy to come and, hopefully, put it back into public use."