Mention Le Palace to Parisians and they will recall a history of murders and intrigue, sex and debauchery, love and despair. But, no, they are not thinking of the Royal Family.

Le Palace is one of France's most celebrated nightspots, the scene of extravagant music hall in the 1920s and a notoriously wild discotheque in the 1970s. For 12 years it was left empty and deserted, with grime covering frescoes on the walls and dust gathering on the black marble bar that once hosted the likes of Mick Jagger, Grace Jones and Andy Warhol.

Next week this most emblematic of Parisian buildings will reopen, although now as a venue in keeping with the new mood of the times. After death, drugs and drag-queens, it will become a 1,000-seat theatre specialising in comedy and concerts.

The biting humour of Valérie Lemercier, the stand-up comedian, will inaugurate the freshly renovated stage. She will be followed in the spring by Jane Birkin, the actress and singer who is France's favourite Anglaise.

“People don't won't sex any more,” said Hazis Vardar, a Belgian entrepreneur of Albanian origin who is behind the revival of the Art Deco theatre in central Paris. “They want shows.”

And shows are what Paris is going to get - provided the welders, carpenters, painters and electricians finish the restoration before Lemercier's first night.

“We're right on schedule,” Mr Vardar said, as workers scurried around him in a frenzy of activity. “But I think I'm going to be spending the next three days here - and probably sleeping here as well - just to make sure.”

Is he not taking a risk in investing a reported €3 million (£2.4m) during the worst economic crisis since the Depression signalled the end of Les Années Folles? “Everyone always says there's a crisis,” he grinned. “Have you ever heard anyone say everything's fine? Crisis is the normal state of things.”

His optimism is founded on personal experience. When Mr Vardar arrived in Paris four years ago, he tried to sell a comic play written by his brother, Alil, to the city's theatre producers. “They all said it was no good. So I bought a bank which had shut down, turned it into a theatre myself and put on the play.”

Le Clan des Divorcés proved to be one of the most successful pièces de théâtre in France, and is still running.

This convinced Mr Vardar that his fortune lay in laughter, prompting him to buy theatres in Paris, Toulouse, Avignon and Montpellier, mainly to stage comedies. Le Palace is his biggest venture to date, although he says he was unaware of its rich history when he bought the deeds.

In 1933, at the height of the music-hall era, Oscar Dufrenne, a director and impresario, was bludgeoned to death, probably in one of the dark corridors where he encountered his lovers. A young sailor was tried for the murder but acquitted.

Almost half a century later Le Palace was turned into a gay club that soon became the centre of the Paris night scene for heterosexuals as well as homosexuals. Village People, Gloria Gaynor, the Bee Gees and Donna Summer all performed there, while Karl Lagerfeld organised what are considered to be some of Paris's greatest fancy-dress parties since King Louis XV's bals masqués in the 18th century.

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