H&M, NEXT and Zara are some of the names in the frame to open a huge new store in Colchester.

Lion Walk shopping centre is in negotiations with several fashion retailers to purchase a 20,000 sq ft outlet in Culver Street East.

Four currently unused units, will be knocked into one shop as part of phase three of Lion Walk’s £5.5million refurbishment programme.

Paul Bentham, the centre manager, said: “Phase three will start some time in the new year. We are talking to about half a dozen huge store retailers, including H&M, Zara, Next and others.”

The second phase of the shopping centre’s development will be completed on Thursday.

Work completed in this phase included new paving and glass panes being refitted.

The switch on of the Christmas Lights on Sunday will also be used to celebrate the completion of the £2.4million section of the refurbishment.

Mr Bentham said: “In the current economic climate, for a private company to invest that much into a single shopping centre, is unique in the country. It will regenerate the town centre.”

Michelle Reynolds, chairman of the Colchester Retail Business Association, said: “The refurbishment looks very good.”

The Lion Walk refurbishment already has planning permission and work has started on the first phase, including removing the bridge over Culver Walk.

Better lighting, new fascias and paving and improvements to the cafe and shop frontages are included in the scheme.

The third phase would involve knocking through empty shops, previously occupied by 02, Paperbox and Samantha’s Innovations to create one large 20,000sq ft unit.

Leading fashion chains could also open in another larger shop which is to be created by joining two other former shops. Mr Bentham said computer company, Apple, had also recently signed up to open in the old Barratts shop, opposite Marks and Spencer’s Lion Walk entrance.

An appeal was launched earlier this year for Primark to open a branch in Colchester.

However, Mr Bentham said it was unlikely Primark would be able to move to the town because none of the buildings likely to be available would be large enough.