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AMSTERDAM | Tue Jan 29, 2008 9:18pm IST

AMSTERDAM (Reuters) - Amsterdam's trademark canals should be drained in sections so that underground parking, shops and cinemas can be built to ease the space shortage in the Dutch capital, according to an ambitious plan launched on Tuesday.

Construction company Strukton, owned by the Dutch railway, proposed building an underground city six floors deep under the picturesque canals, which would be drained section by section while construction takes place and then refilled with water.

The web-like complex could be used for parking, sport halls, cinemas and warehouses, and accessed by car from the highway that circles the city, with exits for pedestrians around the city, Strukton said, launching architect's plans: here

"It is a sustainable and realizable plan. Expanding a city underground is not futuristic but a necessity in today's world," said Bas Obladen, a senior Strukton adviser.

The city has signaled support for the plan but would have to take a decision before work could go ahead, Strukton spokesman Youssef Eddini said.

Residents of the historic houses that line Amsterdam's central ring of canals have to wait years for parking permits and a garage space can cost as much as 100,000 euros ($147,800).

The one-way streets on either side of the water are often blocked for hours by delivery and rubbish trucks, making it far quicker to travel by bicycle.

Eddini said the plan could cost about 10 billion euros and take up to 20 years to realize, but would pay for itself by creating a huge amount of space, cutting the cost of a garage parking spot to 25,000 euros.

"It's a solution for the future of Amsterdam. If we continue in this way Amsterdam will be closed for cars," he said.

Strukton is working on a metro hub under Amsterdam central station for a much-delayed new subway line linking the north and south of the city that has caused traffic chaos for years.

The old center of Amsterdam was built on swampy marshland and many of the houses along the canals are still supported by wooden poles, but Eddini said it would be easier to dig and build in the clay under the canal water.

He said the new plan would not cause as much disruption as the new metro line: "All materials could be brought to the site by water. We can use the canals as a road."

(Reporting by Emma Thomasson, editing by Tim Pearce)

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