Building work on the new Morris Motors Athletic and Social Club in Oxford is due to begin next month.

The 28,000 sq ft clubhouse, on a three-acre site in Crescent Road, Cowley, is expected to be finished by April next year.

Test excavations on the site began in November 2004, but work on the £4.5m project was halted when financial problems hit the club.

The club has now been granted charitable status, exempting it from paying VAT, and the project is back on track.

The club was forced to sell its site to developer Chesside Homes to finance the new clubhouse. The firm plans to build more than 60 homes.

Executive committee member Chris Myers said the club's problems were in the process of being cleared up.

He said: "It all seems to be progressing quite well. We're very excited about gaining charity status. This will mean we will be able to apply for grants and get a windfall of £500,000 from VAT exemption.

"It also means there are no longer any restrictions about who can join the club. Everybody can join and use the facilities for football, dancing, cricket, table tennis, bowls, snooker and bingo. "The last pieces of the jigsaw are finally coming into place. Now we can plan for the future, rather than fighting a rearguard action."

Mr Myers added: "Members will be able to enjoy state-of-the-art facilities that will cater for the whole community, young and old, able-bodied and disabled alike."

The club is currently suing former executive members for money the committee lost, which saw the club plunged into thousands of pounds of debt. The case will continue at the High Court next month.

In 2004, former club chairman Tom Dolliamie was dismissed by the committee. He then sued for unfair dismissal and won. He was forced to stand down as chairman last March after being declared bankrupt.