Isleworth's landmark the Gillette factory is set to be transformed into a hotel, according to a source from the razor manufacturer.

The source claims the building, in Great West Road, has secured a £30million sale from Irish chain the Regency Hotel Group which is looking to branch out further into London.

The Gillette site, which is home to a grade II-listed art deco building with an iconic clock tower, is to close down in the next two years as operations move to a more cost-efficient venue in eastern Europe .

One employee, who has worked for Gillette for almost 20 years and did not want to be named, said: "The hotel group was always the favourite for the building from the start.

"I know that Tesco was interested in buying the site but it set its own conditions on the sale which were not agreed, whereas the Regency Hotel Group had no conditions.

"Production seems set to come to a close in the last week of May and then everything is moving to the new offices in Poland.

"I think the site will be a favourable position for a hotel, especially as it is set between Heathrow and central London, and in light of Terminal 5 currently being built. Personally I would prefer it to be a hotel rather than another office block."

The company, which has had a factory in Isleworth for the last 37 years, announced in 2003 it was to reduce costs and improve operational efficiency and customer service by relocating its blade and razor manufacturing, packaging and warehouse operations throughout Europe and Russia.

The relocation, which should be completed in 2007, involves the closure of the Isleworth manufacturing centre as well as a packaging and distribution operation in Hemel Hempstead, both of which will be shifted abroad.

Since the announcement two years ago, a number of rumours have been circulating as to which company will occupy the art deco office headquarters, including the rumours of the bid by the hotel group.

Although the Regency Hotel Group could have beaten better-known companies such as Tesco to the site, the Gillette company has kept tight-lipped on the matter and refused to confirm or deny whether a sale has been completed.

A Gillette spokesman said: "Our plans for the sale of the Isleworth site continue to progress on schedule and we hope to conclude the process by late October.

"A number of bids from prospective purchasers have been received but until we have concluded the process, we will not discuss or speculate on the nature or status of these bids."

The company's eastern European facility will combine manufacturing with packaging and distribution.

The new facility will produce disposable razors and shaving systems, as well as package, and distribute all Gillette blade and razor products in Europe.

Michael Cowhig, president of Gillette's global technical and manufacturing, said at the time of the realignment decision: "These actions will significantly reduce costs, improve our operating efficiency and streamline our European blade and razor manufacturing, packaging and warehouse operations.

"Our goal is world-class manufacturing that can generate new product innovations, deliver the highest product quality and provide the best levels of service to our retail customers."

The Regency Hotel Group was unavailable for comment.