An artist impression shows how the development will look

Supporters said the plan, to include commercial, retail and 50 new quayside homes would be capable of creating and sustaining more than 300 jobs.

The new scheme is next door to the recently-opened Galeri arts centre and a 50-berth marina.

Some businesses in the town have signed a petition against the development. because of fears it will affect trade.

"The danger is that visitors will come to the Victoria Dock and stay there and not visit the town centre at all, that would be no good," said town mayor and bar owner Ioan Thomas.

This is a record private investment in Caernarfon Richard Parry Hughes, council leader

"There is also a plan to move doctors surgeries from the town to the dock area that's no good either, but if the developers make sure there is a connection between the dock and the town then everyone will benefit," he added.

The project being paid for by WJ Developments, who will invest �23m in developing 2.1 hectares (5.4 acres) at Victoria Dock, with support from the Welsh assembly government and Gwynedd council.

The assembly government will invest �4.3m in the project over the next three years and believes it will open up the area for further private sector investment.

"We can see the beginning of a new era for the community by bringing a redundant brownfield site back into economic use," said assembly enterprise minister Andrew Davies at the official launch of the scheme on Tuesday.

The site is on the banks of the Menai Straits

The plan is to create offices and shops with a Celtic theme showcasing Welsh products and produce, as well as leisure facilities. There will also be 50 apartments and maisonettes on the quay-side.

"This is a record private investment in Caernarfon," said Gwynedd council leader, councillor Richard Parry Hughes.

"The ceremony is the final piece in the jigsaw and demonstrates both the public and private sector's confidence in Caernarfon - it is a development that will provide new facilities and opportunities for the town's people and businesses," he added.

Behind the scenes, work has been going on for 14 years to set up the development.

Councillor Richard Morris, chairman of the joint venture board said: "I'm certain this development will be the catalyst needed to further strengthen the town's economy."