A FUTURISTIC visitor attraction celebrating the history of pop music in Britain is to be launched at the O2, the venue that was once a byword for failure when it was known as the Millennium Dome.

Dubbed “Popworld”, the new exhibition will combine state-of-the-art technology and rare memorabilia from the likes of David Bowie and Arctic Monkeys to trace the evolution of popular music from the end of the second world war to the present day.

Visitors will be able to download classic tracks such as John Lennon’s Imagine on to their iPods or mobile phones as they tour the site and even record their own songs in a mini-studio.

The attraction could also include the country’s first permanent Rock and Roll Hall of Fame, to which new artists will be inducted each year.

Instead of having their names or handprints etched into the wall or floor, as with the Hollywood Walk of Fame, legends such as the Who and Led Zeppelin may be brought to life at the touch of a button through the use of holograms.

“This will cement the O2 as the headquarters of music in Britain,” said Jessica Koravos, managing director of AEG Live, which will open the Popworld attraction early next year.

Its launch will be the latest phase of a remarkable transformation that has seen the much-derided Dome, which swallowed up £758m of public money, become the highest-grossing music venue in the world. Figures to be published this week are expected to show that the O2, which opened under private management last June after lying empty for more than six years, has comfortably outstripped New York’s Madison Square Garden for ticket sales. in Greenwich, southeast London, made about £50mThe O2 from 1.4m ticket sales by the end of 2007, aided by a 21-night residency from Prince in its 20,000-seat arena and the first Led Zeppelin concert for 19 years, drawing together the band’s surviving members.

A blockbuster Tutankhamun exhibition has also helped, pulling in an expected 2m visitors by the time it ends in August.

Talks are now under way to lure Michael Jackson to the O2 for 10 nights this year to celebrate the 25th anniversary of the release of Thriller, the biggest-selling album of all time.

Despite being championed by former prime minister Tony Blair as a symbol of Cool Britannia and receiving more than £600m in lottery grants, the building, designed by leading architect Lord Rogers, attracted only half the number of predicted visitors in 2000 before closing down.

The site remained dormant - costing £30,000 a month in maintenance - as the government struggled to find a buyer for the venue. It eventually agreed to give it to Philip Anschutz, an American billionaire, for a share of future profits.

It later emerged that John Prescott, the deputy prime minister at the time, had stayed as a guest on Anschutz’s Colorado ranch, while the US mogul’s company, Anschutz Entertainment Group (AEG), was seeking a licence for a Las Vegas-style supercasino at the dome.

AEG was prepared to spend £350m to build an arena, 11-screen cinema and exhibition space, but insisted that a casino would be required to unlock a similar amount of investment.

Despite being denied a gaming licence, the rebranded O2, in which News Corporation, the parent company of The Sunday Times, has a 10% stake, opened on time in June last year.

David Campbell, the European head of AEG, admitted this weekend that the venture was a “big gamble” that seems to have paid off, although no profits have been paid back to the government yet.

The Popworld attraction, or the British Music Experience (BME) as it is formally known, is likely to play a central role in future plans for the site, but it will not be a big money-spinner for AEG. The BME will be registered as a charity and run by a board of trustees chaired by Harvey Goldsmith, the concert promoter behind Live Aid.

Robert Santelli, who has worked at the Rock and Roll Hall of Fame and Museum in Cleveland, Ohio, has been appointed its chief curator. With such expertise on board, the O2 hopes the new attraction will outlast Sheffield’s National Centre for Popular Music, which closed after a year in 2000 despite receiving an £11m lottery grant.

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