Where cars once ruled, shoppers will wander into London's own St Mark's Square

A plan to transform Mayfair by extending Hyde Park and burying Park Lane in a tunnel was launched yesterday with backing from the Duke of Westminster, Britain's wealthiest landlord, whose Grovesnor Estate owns much of the surrounding area.

The scheme involves returning the six acres of Hyde Park taken in 1958 to create a dual carriageway and the formation of a four-lane tunnel for the traffic. Marble Arch would be transformed into a huge piazza.

The announcement of the scheme, which will be launched with a public exhibition next week, follows the promotion of pedestrianisation schemes for two other major London sites, Trafalgar and Parliament Squares. If all three plans go ahead, central London will become much more pedestrian- friendly, similar to other large European cities which have moved away from allowing total freedom of access to cars.

The plan involves building the tunnel under the current northbound carriageway of Park Lane, from Marble Arch south to Curzon Gate, just short of Hyde Park Corner. The design also envisages a new bus, coach and Underground interchange to the west of Marble Arch and an improvement to the Marble Arch roundabout.

It would become possible to walk to the Arch itself across the southbound carriageway of Park Lane which would be transformed into a small road for use by buses and taxis only. Shoppers from Oxford Street would be able to wander across to the piazza which the promoters hope would house large cafes and restaurants. A spokesman for the Symonds Group, one of the consultants, said: "The aim is to make it London's equivalent of St Mark's Square with Marble Arch at its heart."

The promoters, Grovesnor Estate Holdings and Grovesnor House, the hotel in Park Lane owned by the Granada group, say that funding will be drawn from both public and private sources. They are prepared to meet half the cost, which would be partly paid back by the resulting increase in the value of their land.

Westminster council, the planning authority, supports the scheme "in principle" and it has the backing of the chief executive of the Royal Parks, which administers Hyde Park.

The scheme is currently constrained by the fact that the traffic director for London, who is the highway authority for Park Lane, has the remit to ensure that nothing is done to reduce the amount of traffic travelling on the road. However, a new government could try to reduce the amount of traffic in London and this would enable supporters of the scheme to devise a better plan. Kelvin Campbell of Urban Initiatives, which helped draw up the plan, said: "We would love it if we did not have to accommodate the existing amount of traffic."

Work could not start on the scheme for at least three years because legislation would be needed and construction would take between two years and 30 months. Therefore, the earliest possible completion of the scheme would be 2002.