In 1164 the Bishop of Durham Bishop Pudsey who was at the time one of the most powerful men in england commissioned the construction of a private palace on land adjacent to St Cuthberts Church.
The palace was described as a Gothic-style house, with a courtyard and chapel to St James and a short tower surrounded by ornate gardens and parks.
In 1605 the palace cellars were used to store plague dead during an outbreak in the town, afterwards that section of the cellars was sealed but the rest of the building remained in use. As time passed and the power of the Prince Bishops waned the palace fell into disuse and in 1806 the building was finally purchased from the Bishop of Durham for use as a township workhouse which it remained until its final demolition in 1870.
Today the town hall stands over the remains of the former palace but while the building itself is long gone several sections of the original cellars remain.
