Block One of the Colossus of Prora - built by Hitler in the 1930s along the lines of Butlins in the UK - will be converted into a 400-bed luxury hotel and 400 apartments.

The building, the single-biggest sold in post-war Germany, had a reserve price of £700,000, but telephone bidding at a Berlin auction on Saturday sent the price soaring.

Prora was constructed on the Baltic island of Ruegen by the stormtroopers of the Nazi 'Strength Through Joy' leisure organisation over a six-year period and occupies nearly three miles of beachfront.

After German reunification, all the buildings were given listed status and a very few have been transformed into holiday flats.

After the auction on Saturday, it is hoped that investment in the remaining miles of accommodation will rise until all are given a makeover.

Initial fears that neo-Nazis would buy into the blocks have proved unfounded. So far, there are a few luxury flats and a youth hostel in the buildings at the site 120 miles from Berlin.

A museum at the site chronicles the history of Prora which, aside from the building of the Atlantic Wall of coastal fortifications stretching from Norway to the border of Spain - intended to thwart any Allied landings in occupied Europe - was Hitler's biggest building project.

The Nazis viewed leisure as just one more aspect of human activity to be governed by the party.

Prora was destined to be the forerunner of a string of such giant camps whose plans were mothballed due to the war he unleashed on the world.