While the first stage in a bold new plan to build a 1000-seat theatre for Bendigo was unveiled this week, a local historian has highlighted that the city's last grand theatre – The Princess – was torn down to build a car park.

Bendigo council's View Street Arts Precinct Master Plan launched this week, hopes to restore the area as an arts hub for regional

Victoria, including a much-larger theatre than The Capital to accommodate high profile artistic companies, shows and conferences.

The Annals of Bendigo show View Street once had a theatre of this size, the

1800-seat Princess Theatre which was compared to Melbourne's finest theatres and even the theatres of Drury Lane in London.But in 1963, after being sold to American Oil Company Amoco, it was torn down to make way for a service station and car park.

Bendigo Historical Society president Jim Evan has noted the irony of the situation, given that a lack of car parking was the reason the last proposed theatre rejuvenation was abandoned in 2002 and was now looming as a potential impediment again.

"But I completely agree with (councillor) Wayne Gregson's position that this should not be an issue," he said.

Mr Evans, who is enthusiastic about the new proposal to integrate the heritage buildings into an expanded arts precinct, said a new theatre would reverse a trend that has seen some of Bendigo's larger public theatres and halls, including the ANA hall in View Street, the Plaza in Mitchell Street and the Lyric in Charing Cross, torn down.

"Even The Capital itself was under threat when the

Masonic Lodge decided it would no longer use it," he said.

Mr Evans said he hoped the dark days of demolition in the 1960s and 70s were gone forever.

"There are a lot of people still angry about that," he said.

"I am still angry about it and I wasn't even here."

Bendigo's Princess Theatre was opened in 1874 as Albion Hall, and after various alterations in 1905 and 1937 it continued to show alternating live shows and movies.

Its final use was to show war film, The Guns of Navarone on Saturday, May

4, 1963, before `Whelan the Wrecker' went to work on July 1 and another part of View Street history was lost.

Council unanimously passed the View Street Master Plan this week during a meeting where Cr Gregson told his colleagues the project was supported by council's recently adopted Arts and Cultural Strategy, which had seen the input of about 2000 residents.

He said the renaissance of View Street was one of the most extraordinary in Australia and the Master Plan would culminate the revival, tying together its various rustic, social and sporting elements.