EXTENSION work has started on Huddersfield's Castle Hill Hotel.
It ends delays that have seen the landmark pub shut for more than a year.
But the appearance of a demolition crew on Saturday morning sparked worried calls to councillors and Kirklees officers from residents who feared the entire structure was being flattened.
Chief planning officer Keith Faragher, Kirklees Council's deputy leader John Smithson and Green councillor Andrew Cooper visited the site immediately to assess the situation for themselves.
Clr Smithson said: "They do have permission to knock a fair bit of it down."
Walls have been knocked through, the interior entirely stripped and two sections of roof removed.
Mr Faragher said: "Somebody has made a fairly drastic start to the work.
"The impact looks considerable but they are not actually demolishing the building.
"All the main walls and roof are still there."
Clr Smithson added: "The plans we approved will make it into a really nice building.
"If they are going to do it and do it properly and most cost-effectively they are going to have to take everything down."
Local residents campaigned against alterations to the hotel, which is owned by the Thandi Partnership.
The hill, capped with an Iron Age fort and visible from miles around, is classed as an ancient monument and closely monitored by English Heritage.
A hotel has stood on the hill since 1812. The nearby Jubilee Tower was built in 1898 to commemorate Queen Victoria's diamond jubilee the year before.
Clr Smithson said: "We knew they had a contractor to come and do the demolition and that the demolition would be extensive."
Mr Faragher took a number of photos to check whether the work fell within the remit of the council plans.
He said: "We are pleased they are finally getting on with it."
Bill Topping, a planning officer at Kirklees Council, said: "What we wanted to do was to ensure that the new hotel or refurbished restaurant respected the ancient monument but also upgraded the appearance of the existing hotel building.
"Obviously the site is prominent and used by lots of visitors."
The Thandi Partnership declined to comment.
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