Labour dumps Millbank, its home of spin, for £5.5m mansion with views of St James's Park

As addresses go, it doesn't have quite the same hint of menace as Millbank, but Labour's new headquarters at 16-18 Old Queen Street, Westminster, confirmed the party's move upmarket yesterday.

The party revealed that it had swapped its infamous home of spin and control freakery for a £5.5m listed building in the heart of the political establishment.

More Art Deco than Heart of Darkness, the new premises will provide Labour's élite with panoramic views over St James's Park, plush new offices and even a private garden.

As if to underline the old joke about Tony Blair being Tory Plan B, the building is also within spitting distance of the former base of the Conservative Research Department.

Key policy officers, the press department and senior figures will be based in the five-storey block, which is only one minute from the House of Commons and Downing Street.

Party chiefs announced in July last year that they were moving out of Millbank after seven years because of a rent rise from £780,000 a year to £900,000. Officials will move to Old Queen Street in the summer, before the party conference season begins. Those employees involved in phone canvassing and research – half of the current Millbank staff – will be heading instead to North Shields, Tyneside.

Senior party sources said the new premises, which would cost £400,000 a year, were "in the heart of the Westminster village" and lacked the "connotations" that Millbank had acquired. "It was synonymous with a certain type of control," the source admitted.

The deal is the brainchild of David Triesman, Labour's general secretary. A former merchant banker and economist by training, Mr Triesman turned around the finances of the Association of University Teachers and clearly hopes to do the same for Labour.

Mr Triesman said the move was an "historic step forward" for the party.

Charles Clarke, the Labour Party chairman, said: "We have found new premises that meet our needs for a modern political campaign centre, which will keep us at the forefront of political campaigning and supporting our members."

Labour leased Millbank in 1995 after moving from Walworth Road in Elephant and Castle, south London. The move to Old Queen Street will be the fifth in the 102-year history of the party.

In 1928, Ramsay MacDonald launched an appeal to finance a move to Transport House, where the Transport and General Workers' Union is based. Fifty years later Labour was forced to find a new home after the union said it wanted the floorspace returned.

In 1980, Lord Callaghan of Cardiff – the former prime minister James Callaghan – opened the party's £1.6m headquarters in Elephant and Castle. Despite the working-class location, the premises were described at the time as "glittering with chandeliers ... as smart as any gentrified house in Islington" – a hint of the New Labour era to come.

As far as the current move goes, there has been one bad omen. The previous tenants of the building were English Partnerships, the brains behind another powerful New Labour symbol: the Millennium Dome.