THE future of Raven's Ait was decided this week, as councillors gave Antoinette Hotels the go-ahead to build on the island.
The island, in the Thames off Portsmouth Road in Surbiton, has been involved in controversy over the past 12 months.
Last November, luxury party and wedding venue company, Ravens Ait Ltd, went bust. Dozens of people planning Christmas parties and engaged couples intending to hold celebrations were left out of pocket.
Weeks later squatters moved on to the island and, despite a court order demanding they leave the island in March, it took a pre-dawn raid by police in May to remove them.
Since then, council tax payers have been paying out £10,000 a month for a security company to look after the island.
But at a meeting of the council's executive on Tuesday, it was announced that the family-run Antoinette Hotels company had won the contract to lease the island.
Council leader Derek Osbourne said about 20 companies had shown an initial interest in moving on to the island and that this had been whittled down to 10 or 12. One of the bids was from a housing developer which wanted to buy the land for £3million and build luxury flats.
Mr Osbourne said: "While the capital receipt would have been very welcomed, we're going to receive a very respectable income from this arrangement and we are happy that a respected, local company is moving on to the island."
A deal is expected to be signed soon and is likely to be for a 50-year lease. The contract will include a clause allowing sea scouts to continue using the island as a base.
Antoinette Hotels - which runs hotels in Kingston and Wimbledon - was founded in 1961 by the grandfather of current owners Paul and Adam Buzasi.
Paul said he was looking forward to starting work on the island as soon as possible. "We hope to establish the area's premier wedding and conference centre and will sympathetically refurbish the island," he said. "We hope we will have support from the local people and that the island will remain a valuable asset for the community."
He said the island would keep its name and that the company was keen to promote its history, which dates back to the 11th century.
Plans will be submitted to the council's planning department after the contract has been signed. Mr Buzasi said he would be speaking to planners about whether a hotel could be incorporated into the venue.
Opposition councillors criticised the council for not consulting the public and for not accepting the highest bid.
Conservative Nick Kilby said: "Surely selling this important landmark for a knock-down price and for a use that may not bring the best benefits possible for the residents is ridiculous."