Sir Cameron Mackintosh has revealed details of his five year, £35m plan to refurbish his London theatres and create a completely new one.

Costing approximately £20m, the most ambitious element of the project is the complete "reinvention" of Shaftesbury Avenue’s Queen’s and Gielgud island site.

Part of the plan for the site is the creation of the first theatre to be built in Shaftesbury Avenue for 31 years, a flexible, 500-seat studio which will be constructed above Queen’s.

To be known as The Sondheim Theatre – named for the composer and lyricist, Stephen Sondheim – it will be able to accommodate extended runs of musicals and plays transferring from Britain’s leading small-scale theatres.

Sondheim said: "The news that the West End is at last getting a theatre which can take transfers of productions from Britain’s subsidised studio playhouses is thrilling for British writers and audiences."

He continued: "The fact that Cameron has seen fit to attach my name to it is thrilling for me. We have a lot of such theatres in New York and the plays they house are the lifeblood of new American playwriting."

Elsewhere on the island site, work – due to begin in early 2006 – will result in a large communal foyer area linking both the Queen’s and the Gielgud, plus improved public circulation.

Seating capacity in the Queen’s will be increased from 990 on three levels to 1,213 over two levels, an alteration designed to improve comfort and sight lines in the auditorium.

Disabled access to the theatre will be enhanced, in addition to increased bar and toilet facilities.

At other venues in the Mackintosh group, work on the Prince of Wales theatre, built in 1937, will see a total refurbishment of the building, with an improved façade, revamped entrances and a rebuilt auditorium.

Greater leg-room and more comfortable seats will be provided for audiences and the theatre’s two bars will become two of the largest in the West End. The work, costing approximately £7m and starting in September, will also involve backstage rationalisation and reorganisation.

At the Strand Theatre, the main objective of a £1.7m scheme is to recreate the glamour of the original interior as well as upgrading and expanding the public areas and facilities. Auditorium sight lines and disabled access will be improved.

Wyndham’s Theatre will benefit from works to improve public entrances and the Albery Theatre will see improved public circulation areas and greatly increased bar capacity.

The Prince Edward Theatre was refurbished in 1992 at a cost of £3.3m.

Commenting on the plans, Sir Cameron said: "My dream is that what we will be doing to reinvent the theatres will reinvent them for another lifetime."

Councillor Simon Milton, leader of Westminster City Council, said: "I am delighted that this investment from Cameron Mackintosh can build towards achieving our vision of rejuvenating the West End."