At a breakfast meeting in 2002, a senior pro-rector at Central St Martins College of Art and Design was asked if the college would like to move into a new development in King's Cross.

In the years that followed, plans and budgets were developed. Everything began to fall into place, and then - at a crucial moment in 2008 - the financial crisis struck.

The result was "a lot of gritting of teeth about whether we should sign the contract", said Jane Rapley, the college's head.

In the event, managers held their nerve - and Central St Martins, which is part of the University of the Arts London, is now set to move out of premises including the large, rambling building at the end of Kingsway in Holborn, which Professor Rapley described as "a rabbit warren, designed for a late-Victorian art college".

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It will be taking up residence on a site that is "tougher, plainer, more obviously industrial, with a smaller footprint but a greater sense of space".

The development incorporates a granary, a goods shed and a former canal basin filled in to create a public space the size of Trafalgar Square. If all goes to plan, it will include an open-air food market, retail outlets, craft galleries and design-related practices.

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The area also offers a number of cultural attractions and potential partners for Central St Martins, such as the British Library and the Wellcome Foundation.

But can the college reinvent itself for the 21st century while squeezing itself into a smaller space?

"We need to look at technology, teaching and learning styles," Professor Rapley said. "We've given priority to things that students couldn't access in any other way, such as the technical infrastructure of the workshops, whether digital or bashing metal. We've also protected the library space, which students absolutely love."

What has been reduced, however, is "personal ownership of space by students or disciplines. We will now share space and workshops across disciplines, which creates greater opportunities for cross-fertilisation."

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The division between graphics and fine art, for example, is breaking down.

"Because of the nature of the building, we can't colonise so much space behind locked doors, so there's a lot more chance for students and staff to use communal and social spaces."

Professor Rapley said that art schools would have to consider changing the traditional structure of an arts education.

In the future, she predicted, "the engagement with what we have to offer may be more fragmented, as people have opportunities in different parts and stages of their lives ...? We have to be much more imaginative about how we package what we have to offer."

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Ultimately, however, Professor Rapley believes that art colleges still face the same central challenge: to equip their students with the fundamental skills and the ability to go beyond them while fostering a willingness to take risks, which tends to be "interpreted in different ways, inside and outside the college, as either arrogance or confidence".

Looking ahead 10 years, Professor Rapley said she hopes Central St Martins "will still have its core learning about graphics, fashion, acting and directing, but that more and more of our graduates will be confident to engage with the loops between the core subjects, which is often where you get the impetus for new commerce, new developments and new culture".

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matthew.reisz@tsleducation.com.