To do what they’re doing on this scale, and still score hit after hit, is quite the achievement

The Palace Hotel building has loomed over Manchester’s Oxford Street since the 1890s, a glum, Gothic monument to late-Victorian commerce. There’s no doubting the magnificence of the place: the former Refuge Assurance Company has soaring ceilings, ornate cupolas, acres of lugubrious, decorative tiling. But it always struck me as the hero of its own horror story, smelling for ever of ancient cabbage and gravy, and staffed by grey-skinned retainers in league with ghouls ready to pounce as you slept fitfully in your slightly mouldy bed.

Brrr. But no more: the exterior is still as powerfully gloomy as ever, but inside a transformation has taken place. As part of a multimillion pound restoration of the whole site, a new restaurant and bar have been created. When I first heard that Luke Cowdrey and Justin Crawford, aka DJs The Unabombers and owners of West Didsbury’s neighbourhood favourite Volta, were going into the Palace, I thought: nuh-huh. This felt wrong, all wrong. Their signature is small, friendly, slightly batty – no way would that work in this cavernous space. But I couldn’t have been more wrong: it’s a jaw-dropping, dazzling tour de force, from the glittering bar with its many on-tap ales and beers and truly fine cocktails, to the twinkling, fairylit Winter Garden. The Refuge is now less scary old crone and more dramatic, drop-dead glamourpuss. A vague echo of the Overlook Hotel from the Shining only adds to the vaguely spooky allure.

Anyone who has eaten at the original will recognise the Volta style, careering all over the globe with decks in tow. They talk the local produce talk, but fling it about with the louchest abandon: South American ceviches, Middle Eastern mutabal, pak choi, chimichurri, preserved lemon – the whole polyglot shebang. Lamb shawarma, a Volta stalwart, brings a pile of meat with a massive thwack of flavour, some shreds pleasingly biltong-chewy, others moist and mutton-ripe, with a pool of harissa and thick, cooling yoghurt: no looker, but an appealing brute of a thing. Cooking fish for this size of operation is a brave move, but the kitchen nails it: whole sea bass is fragrant with lime, ginger and coriander, its belly pregnant with pine nuts, its cooking perfectly judged. A fat slab of flawless, crisp-skinned hake comes on a black “daal” made not of lentils, but of black-eyed beans, all murky with masala and topped with shards of fresh ginger. Stout bruisers of salt cod croquettes are crisp outside and fluffy with emulsified fish and mash within, plus a properly pongy aïoli flecked with parsley on the side.

There are nods to the US: buttermilk chicken (not hugely crisp, but succulent, brined meat) comes with cast-iron pot of cornbread seething with fruity, fiery jalapeño butter. And pear and hazelnut tatin, its crisp edges tarred with caramelised fruit juices, is a clever rethinking of a classic, its deceptively soothing espresso custard a bullet straight to the cranium.

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Yes, there are teething issues: food seems to come from far, far away, occasionally turning up the wrong side of tepid; seasoning can be a little off. And there’s a truly lamentable ice-cream sandwich: cookies should be gooey enough to almost cuddle the ice-cream, not dry and dusty. But to do what they’re doing on this scale, and still score hit after hit, is quite the achievement. We’re seated at probably the worst table in the house, marooned beside a glaringly lit service corridor whose door chills us with every swing. The fact that I still feel well disposed to the place is testament to what the guys (with Robbie Bargh from the estimable Gorgeous Group) have done here. I’m even turning a blind eye to the fact that Cowdrey and Crawford are described as “curators”, which, for me, is quite something.

Facebook Twitter Pinterest Lamb shawarma: ‘No looker, but an appealing brute of a thing.’ Photograph: Rebecca Lupton/The Guardian

This is the kind of opulent space that, in other cities, would be chilly and exclusive; there are squads of the inevitable scenesters, sure, but also families with babies, balding, middle-aged businessmen and even a few fabulously coiffed pensioners. There’s a daily People’s Lunch for only £7.50.

“The Glamour Of Manchester” declares a revolutionary-style mural over the glazed-tile back wall. I can only agree: the Volta duo have tamed this monster of a place, this beast, and turned it into an absolute beauty.

• Refuge by Volta The Refuge, Oxford Street, Manchester M60, 0161-233 5151. Open all week, noon-3pm, 5-10.30pm (11pm Sat, 10pm Sun). About £30 a head, plus drinks and service.

Food 7/10

Atmosphere 9/10

Value for money 7/10