THE last time the disused 19th-century rice mill just off Argyle Street in Glasgow impinged on the public consciousness was when pop group Jamiroquai used it in a video to epitomise urban dereliction.

Ian Milton, energetic boss of the Highland-based Milton hotel chain, has a new plan for it. The variegated brick building is to form an historic centrepiece for his #10m flagship hotel, which is likely to be the focus for the regeneration of the former warehouse district.

The family-owned business - Milton splits the shares with a trust for his children - has five other hotels in Fort William, Inverness, Oban, and Stirling. It turned in a profit in the year to April 2000 of #350,000 on a #7.6m turnover, and expects a similar performance this year.

The latest 128-bedroom hotel in Washington Street, which will employ 100 people, will also

feature 12 luxury loft-style apartments. The funding comes from the Bank of Scotland and the opening in September this year will push the number of hotels in the city towards

100, from a total of just 42 in 1984.

Milton accepts that he is entering uncharted territory with his city-centre venture, which should cash in on plans to revitalise the Clyde waterfront area.

''In all our other properties,'' he said, ''the trade is traditional tourism, because of the High-land locations. In the Glasgow Milton, we'll be dealing much more with business and conference custom. It's a bit like you suddenly switching to magazines from newspapers.''

Milton has been in the hotel trade since his shoemaker father returned from the war and became disenchanted with his shoe shop in Fort William. He ran the rule over a hotel in the town and, despite the fact that his Dough School-trained wife had rejected it, bought it the next day.

Both his sons joined him in the business, but the hotel had no room to expand, and, in 1965, the family built a new hotel on the outskirts of the town.

After his father retired, the boys continued to grow the business ''not with any particular plan in mind, but just when an opportunity came up'' until they had the current portfolio.

Milton hit a cash drain in 1992 when his brother took early retirement and he had to buy

out his half of the firm. ''That slowed me in my tracks for a while,'' said Milton, ''but four years ago we were able to

refurbish the hotels and start

the first leisure club.

''Inverness was a good test

for our leisure club concept,''

he said, ''because there were three established businesss in

the town. But within a year we had more members than the others.''

The leisure clubs are run as a separate division which reports to the operations director, and the executive in charge has moved to the central belt to head the leisure side of the Glasgow Milton.

The restructuring and expansion of the group coincided with Milton's personal conversion to the management philosophies

of Michael Gerber, author of The e-myth.

''In essence,'' said Milton, ''Gerber asks managers to walk into their business and ask: 'Could I sell it today?' If the answer is no, they should imagine that they have just bought it and ask themselves what needs to be done to get it into a position where they could sell it.''

After attending a Gerber seminar in London, Milton

instituted a consultant's report which recommended 500 changes to the way the group operated, from telephone manner to the ways in which staff interact with each other.

The group's 280 employees now face continuous assessment, and the most junior can comment on the most senior, with score cards marking progress.

''We try to tell the staff how they fit into the picture not only for today, but tomorrow,'' said Milton, who has been known to attend focus groups disguised as a waiter in order to obtain an accurate appraisal of his customers and what they really want.

He believes Gerber's thinking helped him identify the Glasgow project as he listened to an architect talk about an acquisition opportunity in Peterhead. Milton started to describe what he actually wanted from a hotel and the architect realised his vision fitted exactly the Argyle Street site which had lain derelict for

12 years.

''If you tell people what you want they can help you. If you don't, they won't. If you do somebody a favour, it comes back to you, maybe not directly, but down the line,'' he said.

Milton is convinced there is plenty of room for him despite the proximity of bigger competitors. ''Just look at the occupancy rates they're getting,'' he said.

And he took a policy decision to upgrade his project from three to four-star.

''There is a great growth in budget hotels still to come in this country and they are going to be running against the three-star outfits.

''They're already killing the two-star hotels. So we wanted to open up a margin.''