It is the nightmare dreaded by any Londoner who has ever had the builders in. There are sharp intakes of breath as the exploratory work reveals wiring and plumbing disasters, deadlines are ditched and the budget spirals hopelessly out of control.

But this is not a side-return extension for a three-bedroom semi, this is The Savoy, arguably London's most prestigious hotel, a 268-room grande dame whose name stands alongsideRolls-Royce and Burberry among world-class British luxury brands.

When The Savoy closed on 15 December 2007 for a planned 16-month, £100 million makeover, it was hoped the hotel would quickly resume its status, buffed and restored to its former glory.

But things have not gone according to plan at the former haunt of Chaplin and Churchill. The original reopening date slipped from spring to summer to autumn 2009, then to February this year. The Standard has learned that it will now be June — at the earliest — and more likely July before those famous revolving doors turn again.

The original £100 million estimate for the work has been ripped up and although operators Fairmont Hotels and Resorts will not disclose the actual figure, the 15 months of work suggests it could be close to double that sum.

On top of that, with 268 rooms at an average rate of £350 a night, the hotel is losing £650,000 of revenue for every week it stays dark. The lengthy overrun means that Fairmont has missed out on perhaps £50 million of revenue and £10 million of profit.

In the meantime, the world has changed dramatically — and not to The Savoy's advantage. The financial storms that have been raging during the closure mean that many of the bankers and corporate bosses who saw the hotel as a home from home have had their generous expenses cut.

So why did the project planned so meticulously go so wrong and has the delay damaged The Savoy's chances of regaining its place at the front of the Five Star pack?

This week, the Evening Standard was given exclusive access to a building which is still a long way from recapturing its gloriously understated blend of Edwardian and Art Deco style and its reputation for five-star hospitality.

The gorgeous visions of interior designer Pierre-Yves Rochon remain to be realised. Polished mahogany panels peep from dustsheets in the main lobby. Wires dangle from the scalloped ceiling of the gutted American bar, and the River Room restaurant is a mess of trailing cables, scarred pillars and scaffolding.

The Ballroom, which for years played host to the glittering Evening Standard Theatre Awards, is a plasterboard canteen for some of the 1,000 workmen involved. The Savoy Grill is padlocked, awaiting Gordon Ramsay's return.

“The refurbishment is clearly very much in delay, and it's fair to say the budget is now in excess of £100 million,” concedes general manager Kiaran W MacDonald. “A critical reason for this is the level of dilapidation of the hotel. Although we had done two years of planning and tried to assess the level of issues behind the walls, it's only when you close the doors and open it up that you realise the amount of work is much more serious and extensive than first envisaged. We are talking about the basics of plumbing and electricity, structural work.” Is the cost likely to be £110 million? £150 million? £200 million? “It's only when we start pulling it all together that we will know what the true exposure is.”

Part of the problem was The Savoy's unplanned, organic growth. Opened in 1889 by Richard D'Oyly Carte, beside the Savoy Theatre where he mounted Gilbert and Sullivan's operettas, the hotel was substantially augmented and altered in its early years. “We always think the Victorians built things well but they also bodged a lot,” says Conrad Reardon, managing director of Reardon Smith, the specialist hotel architects implementing Rochon's designs. “What was an open courtyard suddenly became a room, with a mix of internal and external walls.” Digging up the roadway in Savoy Place, off the Strand entrance — still the only place in the UK where one must legally drive on the right — he found a huge gulley running around the perimeter, instead of a solid foundation. “We don't even know what it's for.”

MacDonald adds that in 1910, the balconies that used to face the Thames were incorporated into the guest rooms to create bathrooms. After closure, he and his team found that not only were the original balcony floors unsound, but a new wall had effectively been “hung” in front of the balconies from beams laid on top of the roof. This wall was resting on the ground, but the roof was bearing the weight. It took 200 tons of steel to hold the building in place, with laser beams on the south bank of the Thames monitoring it for movement.

Exploration also revealed a mass of entwined wiring and lead piping embedded in the walls, much of it mysterious and all of it warranting wholesale replacement. Where mouldings or skirtings have been removed, exact facsimiles have been commissioned.

The huge expense and loss of revenue mean The Savoy has to “hit the ground running” when it reopens if the money is ever to be recouped. Its five-star rivals have made hay accommodating and feeding The Savoy's homeless hordes. A manager at one said: “Hotel travellers are very promiscuous, they will, as it were, sleep around. While you are off the scene many will have happily moved on and it could take years to get them back.”

It has also been a long wait for Ramsay who will be overseeing the Savoy Grill, once regarded as London's power-broking lunch destination par excellence. Those days have gone, politicians can no longer risk being seen hobnobbing with business leaders in such opulent surroundings. Ramsay says he is relaxed about the delay but the grill was one of his group's biggest money spinners and the reopening cannot come a moment too soon.

Throughout the overhaul, rumours about a sale by owner Prince Alwaleed bin-Talal have hung over The Savoy, gossip that is rejected out of hand by MacDonald.

“It would have had to be a particularly acute situation to try and sell a distressed asset like this,” he concedes. “The prince sees it as a long-term investment. We have absolutely had his backing all the way through, without question. Everything is focused on reopening, repositioning The Savoy, making it a success.”

Rochon's refurbishment is designed to recapture past glory. There will be butlers at The Savoy for the first time since the mid-1990s, now taking on the duties of the personal assistant.

Beneath the dustsheets are hints of what's eventually to come. A tea shop is taking shape next to the Thames foyer with its lovely new dome. There will be Bill Amberg accessories in the rooms, a new but “sympathetic” outlet for Boodles jewellers in the streamlined lobby. Eight rooms have been sacrificed to make a new 3,500sq ft Royal Suite, looking over Embankment gardens and the South Bank.

So can The Savoy truly reclaim its status in a 21st-century London where, as one analyst put it: “The guy hanging about in reception with ripped jeans and a BlackBerry is likely to be worth more than the chap in the pinstripe suit?” With the Olympics on the horizon there should at least be no shortage of guests and The Savoy name still exudes an unmatched prestige.

Most Londoners agree it will be good to have it back. But with at least half a dozen new five- and six-star hotels in the pipeline in London, the competition will be fierce. When the dustsheets finally come off, The Savoy will have to look stunning. Nothing else will do.

Berlin's Checkpoint Charlie gets McDonald's

Published: 29 Dec 09 18:16 CET

• Walking the Berlin Wall then and now - National (9 Nov 09)

The 600-square-metre (6,500-square-feet) location overlooks where Soviet and US tanks famously faced off in 1961.

Spokeswoman Christiane Woerle told AFP said that McDonald's, which has come to symbolise US capitalism more than any other firm, has applied for planning permission with the German authorities.

Checkpoint Charlie was the main crossing point for foreigners between East and West Berlin from the post-war division of the city until the fall of the Berlin Wall in 1989. After the communist East German authorities erected the Berlin Wall overnight in 1961 as an "anti-capitalist protection barrier," the crossing point expanded over the decades to include several traffic lanes.

Twenty years after the fall of the Berlin Wall, the city is barely recognisable, having undergone such an architectural metamorphosis that visitors find it hard to tell what was West Berlin and what was East.

The area around Checkpoint Charlie is no exception, with the path of the Berlin Wall now marked by a line of cobblestones and only an open-air gallery showing tourists how the border crossing used to look.

It is a major tourist attraction nonetheless, with coach loads of visitors flocking to buy souvenirs and to pose in photos with enterprising locals dressed as Soviet and Allied soldiers, who also stamp passports for a fee.

The landmark is home to a reconstruction of a border booth behind sandbags as well as a replica white sign informing people they are either leaving or entering the "American Sector" in English, Russian, French and German. Above the hut there is a large photo of a Soviet soldier, and on the other side, as you head south down Friedrichstrasse into the former West Berlin, a US serviceman.

McDonald's is no stranger to opening in sensitive places, including in the same building as Prague's Museum of Communism, across the street from Windsor Castle in Britain - and in the US naval base in Guantanamo Bay, Cuba.

In Berlin, the "Golden Arches" logo will adorn a building currently occupied by a myriad of eateries including a sushi restaurant, a kebab outlet, a pizzeria and a Subway all collectively known as "Snackpoint Charlie."

Berliners on the whole seem pleased.

"I think it's great," Alexandra Hildebrandt, who runs the Wall museum, told Bildnewspaper. "Checkpoint Charlie symbolises the United States, and so does McDonald's. They go well together."

"McDonald's is definitely a gain for every local and tourist. Because the food here was rubbish," said Matthias Fischer.