Work has begun on new headquarters for the Western Mail & Echo.

A £17m office building is being built on the former car park of the company's current premises Thomson House, and more than 500 staff are due to move in by summer 2008.

It will be home to the Western Mail, South Wales Echo and Wales on Sunday, as well as being regional headquarters for Celtic Weekly Newspapers.

The six storey, 60,000 square foot headquarters will be branded with a red dragon, still subject to planning approval, and there will be car parking on the ground floor.

Managing director Keith Dye said: "I am delighted that construction of our new headquarters is now underway. Our staff have been very patient throughout the lengthy planning negotiations.

"We are currently undertaking major investment in our advertising and editorial systems, and the completion of the new building next year will further underline our commitment to Wales."

Once the new building is complete the existing Thomson House will be demolished to make way for a hotel and apartment complex.

Outline planning permission has been granted for a 250-bedroom Jurys Inn and a 261-flat complex.

The Western Mail & Echo's new headquarters will be owned by parent company Trinity Mirror but, as is the case for Thomson House, the land is owned by Cardiff County Council.

A new 125-year ground lease has been negotiated for the new premises.