Informal talks are being held between Air Malta and Mepa on possible development of the Selmun Palace Hotel, which has been closed for some three years.
Prime Minister Joseph Muscat said in reply to a question in parliament by Censu Galea that no development application had been submitted to Mepa.
Mr Galea had asked whether it was true that a major extension of the hotel had been requested and what Mepa's reaction was.
Replying to a similar question, the minister for justice and local councils, Owen Bonnici said any development proposal would have to go through the channels laid down by law.
He said this government initiative was aimed at making the Selmun Palace a reference point in the North of Malta.
The government and Air Malta have made a number of efforts to sell the hotel, without success.