The Castle By The Sea, now a guest house in Mulgrave Place, has been the home of two oak framed terracotta panels for over 130 years.

But time and neglect has seen the attractive Victorian panels being covered by several coats of paint and they are now so tarred by tobacco stains that the building's current owners, John Cresswell and his fiancee Janet Bannister, decided it was time for a major clean-up.

It is believed the panels were given to a former owner of the house, famous artist John Atkinson Grimshaw, who moved into the property in 1876.

He supposedly received the panels from sculptor Sir Joseph Edgar Boehme in return for two of his paintings.

Boehme was one of the Victorian era's foremost sculptors who won the Imperial prize in Vienna in 1856 before settling in London in 1862 where he later became Sculptor in Ordinary to Queen Victoria.

His work includes the portrait head of Queen Victoria on the 1887 Jubilee coinage, as well as sculptures in London of the Duke of Wellington at Hyde Park Corner, and General Gordon in St Paul's Cathedral.

The panels in The Castle By The Sea are mounted over one of the main doorways. One depicts a child on a camel while the other features a child on a griffin, each bearing a banner. It is hoped the conservation work will reveal the original script.

Mr Cresswell, 48, who moved to Scarborough from Nottingham last July and bought the business last month, said: "I do not know why more care has not been taken in the past to preserve the panels. We have found what we think may be traces of gold on the camel. The process of conservation is very slow, but we are waiting in anticipation to see what is revealed."

The work, which is expected to take around six weeks, is being carried out by Alison Walster, from Sheffield, who runs her own company, Ardvark Conservation Services.

Ms Walster, who has recently completed work for Scarborough's newly refurbished Rotunda Museum, is using an ecologically friendly paint stripper to remove the layers of paint which cover the original terracotta.

She said: "These panels are actually pretty fantastic, and as far as I know they are one of a kind. Their uniqueness is really important to the building, as well as to Scarborough and the history of Grimshaw."

The conservation of the panels is part of a new project the owners have started to get the building back to its original state as much as possible.

They also hope to restore the glass skylight which looks over what was previously the Grand Hall, where Grimshaw exhibited his art.

Anyone with any information, or old photos of the building that would help the couple to learn more about the history behind the building, are asked to contact John Cresswell on (01723) 365166.