Inspired by Japan's famed capsule hotels, easyHotel promises cheap rooms in London that measure just 49 square feet.

Officially, they range from 60 sq ft to 80 sq ft but the Guardian's tape measure puts the smallest rooms at 49 sq ft, with a 7ft-high ceiling and a 14 sq ft en suite pod, cramming in a shower, sink and toilet. Room to swing a cat, there is not. Nor are there windows. In keeping with the easyEthos, such frills are ditched in favour of value for money.

Critics think the venture is doomed to fail because it's overpriced.

Mr Haji-Ioannou, who hopes to expand the model through a franchise network across Europe, said he expected occupancy to remain above 90%, with room rates averaging out at �35 a night to break even.

This came as a surprise yesterday to Nabeel Khalid, whose nearby Green Court hotel is one of scores of guesthouses and hostels in the area, known for its popularity among antipodean backpackers.

"I thought Stelios was going to offer rooms from �5 or something like that," Mr Khalid said. "If you were to shop around, there are hotels which will match or beat his prices." The Green Court offers single rooms from �38, including satellite television channels, breakfast and rooms with windows. At quieter times prices drop to �25, he said.

Hostels, popular with backpackers, cost about �15 for a no-frills dormitory.

At easyHotel, by contrast, guests must get their own breakfast, pay �5 extra for access to the TV remote control in their room, and �10 to have their towels and bed linen changed.

Then there's this, from the EasyHotel FAQ:

Is there a laundrette or facilities for washing clothes?	No
Is there a telephone available in the room / hotel?	No
Can I store my bicycle within the hotel?	No
Can I buy alchohol at the hotel?	No
Is there a mini-bar in the room?	No
Is there a gym in the hotel?	No
Is there a swimming pool in the hotel?	No
What items are prohibited?	The use of electrical appliances such as toasters, kettles and mini cookers are expressly forbidden in the hotel.
Is there a wardrobe in the room?	No wardrobe or allocated storage area in rooms. There is a storeroom for bulky items of luggage.
Can I hang my clothes up in the room?	There are two coat hooks in each room.
Do I need to bring my own soap, shampoo, etc?	Soap is provided - anything else you will need to bring.
Are there electric razor sockets in the rooms?	No
How big are the beds?	All beds are standard doubles 4' 6" (120cm) wide by 6' (180cm) long.
Do the rooms contain hair dryers?	No
Are safety deposit boxes available?	No
Are, extra beds, cots, or cribs available?	No
Are adjoining rooms available?	No
Is there a lift inside the building?	No

That's right, not one, but TWO coat hooks in each room.