An 18th century coaching inn on the remote Kintyre peninsula is to spend more than £136,000 (pounds) upgrading its faciltities and creating three new full-time jobs.

The Argyll Hotel, on the main road from Tarbert to Campbeltown was bought in 1997 by husband and wife team Barry and Barbara MacKenzie. The inn has six bedrooms, with views across the Bellochantuy bay, a residents lounge, beer garden, dining room and bar.

Mr MacKenzie said: "Although the inn was in a fairly poor state of repair when we took it on, we knew it had great potential. It overlooks three miles of sandy beach and has stunning views across to Islay and Jura. We've been refurbishing the property over the past few years and now have three star Scottish Tourist Board status. This latest investment will help us upgrade to a four star rating."

The couple plan to convert the residents lounge on the upper floor to provide a further three en-suite bedrooms. A new conservatory will be built providing an additional dining area and doubling seating capacity from 60 to 120 people. The inn offers a wide variety of home-cooked meals and specialises in seafood evenings during the summer months. Work is expected to be complete in the late spring.

The re-development is being supported by Argyll and the Islands Enterprise (AIE) with an investment package worth £34,000 (pounds). AIE has also levered a matching KONVER II European grant designed to support communities affected by the closure of military bases.

Chief executive of AIE, Ken Abernethy said: "Providing high quality accommodation is critical and we actively encourage improvements to all tourism related services across the region. The Argyll Hotel is a great example of a local business that strives to improve the service it provides and is clearly switched on to the benefits of e-commerce with a comprehensive web page providing information on the hotel itself and surrounding attractions."