Interest has at last been shown in the development of the former Kit Kat Club site and the resort's potential as a year-round watersports centre is emerging as a key feature of regeneration talks.

The eyesore remains of the once-famed Kit Kat Club were finally demolished in 2002, nearly four years after it was left gutted by a three-hour inferno.

The cleared site has been a blot on the seafront ever since, but talks are now under way with architects about a possible new scheme combining commercial and residential use.

Cllr Elizabeth Watson, who leads the regeneration project team for West Norfolk Council and Hunstanton Town Council, said: "The site is absolutely terrible and something needs to be done about it. The architects are now talking to the planners and it will possibly be one of the first of the improvements we see."

Last week saw more discussions between councillors and regeneration consultants in preparation for the production of a master plan for the future development of Hunstanton.

Cllr Watson said: "We wanted to put more emphasis on watersports. Hunstanton is uniquely situated to make the most of them."

Watersports also emerged as a priority from the public consultation process, she added.

Another Hunstanton councillor, Jason Law, said the number of sports enthusiasts on the water during the last Christmas holiday was an indication of things to come. "These people don't mind getting out there all-year round," he said.

They also needed somewhere to eat and drink, which was good news for the resort's many cafés and restaurants. "If you ask any of the traders locally, they all talk about expanding the season to make shops more viable. They will benefit hugely," said Cllr Law.

Hunstanton's profile as a water sports destination had also been raised when it hosted the world waterski championships in 2005, he said.

Regeneration consultants' final version of the proposals was due on Friday, June 27 and would be made public around the end of July. After further discussions, it was expected to be considered at a full meeting of West Norfolk Council in September, said Cllr Law.

• The Kit Kat Club was built in 1932 and in its heyday boasted a ballroom and downstairs bar, each capable of accommodating 200 people.

Declining popularity and noise complaints contributed to the venue's final closure in 1996.