Hotel group Le Meridien said last night that Royal Bank of Scotland (RBS) plans to take over 11 of its hotels - including the Shelbourne in Dublin.

"Royal Bank of Scotland has advised the group that it intends to take back control of its hotels in the UK and Ireland. The 11 hotels will, over time, move out of the Le Meridian brand and the Group," said the statement.

Mr Simon Freakley and Mr Alastair Beveridge from Kroll's corporate advisory and restructuring group were appointed by RBS as joint administrative receivers to two of the hotels, the Grosvenor House and the Waldorf, yesterday.

RBS sources said the Shelbourne and the other hotels in the group will be put into receivership over coming weeks. But its survival is not in question, they stressed. RBS purchased the Shelbourne and 10 other Le Meridien hotels, including London's Grosvenor House and Waldorf, in a 2001 sale and lease-back deal with Le Meridien.

Saddled with an estimated €1 billion in debts, Le Meridien has been unable to strike a deal with creditors to allow it pay rent overdue to RBS, paving the way for the bank to assume control of the Shelbourne and other hotels.

Mr Freakley said: "During this transitional stage, we will work closely with existing management to ensure that, as far as guests are concerned, everything is business as usual."

Mr Stephen Alexander, chief executive of Le Meridian, said: "Whilst it was our preference that the final outcome would see the group remain together, it is nevertheless good that we now have greater clarity on the future structure."

The RBS is understood to have decided to exercise its option to take back the hotels and to put them into receivership in an effort to extract them from the problems facing the embattled Le Meridien group. The remaining hotels in the group will continue to trade while bankers try to agree a deal to inject fresh cash into the business.

Venture capitalist Mr Guy Hands led a buyout of Le Meridien for Japanese investment house Nomura just before the hotel and tourism industry suffered the hammer blow of the September 11th terrorist attacks.

A proposal by US investment bank Lehman Brothers - which would see Le Meridien's other 126 overseas hotels remain in operation thanks to a £100 million cash injection from the bank - was also expected to be approved overnight. Management of the hotels could then be put into the hands of the Hyatt hotel chain but Le Meridien would retain its own branding.