LONDON (REUTERS).- Derelict oil tanks and forgotten industrial spaces hidden in the bowels of the Tate Modern art museum in London will open to the public in summer 2012, providing a new area to "revolutionise" the museum's work, directors said on Thursday.

The opening of the enormous and atmospheric oil tanks in the former power station on the banks of the Thames will provide flexible, subterranean "lunar" spaces and form the foundation for a further expansion of the world's most visited modern art museum. The expansion will also include a new 64-metre high building and is set to be completed in 2016.

"The oil tanks will give visitors a new way to explore and experience art at Tate Modern. Architecturally they are fantastic raw spaces, which are being carefully converted for public use without losing any of their unique industrial character," Tate Modern Director Chris Dercon said.

This completed space will not only showcase objects, but live performances, film, sound, learning spaces, piazzas and areas for socialising, including a terrace offering panoramic views of the British capital.

"The museum is not just about viewing and judging objects but mental and bodily exercises - we want to provide a new form of social space for interactions," Dercon said.

The costly Tate Modern Project development is estimated to reach 215 million pounds ($343 million), 70 percent of which has already been raised through unnamed donors.

However, the expansion is necessary to maintain the museum's status as the one of the leading art organisations in the world and "set the benchmark" for the future of museums, according to the director.

"Museums are a constant work in progress and are constantly changing and transforming. That is the definition of contemporary arts today. The Tate Modern expansion is a response to the ever-changing field of contemporary art, and it will influence that field," Dercon said.

The project reflects a broader change in the contemporary art world over the last 10 years tending towards the use of media such as film and video, Dercon said.

"Contemporary art is performance, projection -- we need to provide spaces for events, live arts, time-based arts, as well as small events such as lectures, symposiums and films," Dercon said.

The finished project will not only expand gallery space by 70 percent, it will also increase visitor capacity of the museum.

The building is currently designed for two million visitors a year but often sees crowds in excess of five million and during 2010-11 this figure reached 7.4 million.

"The Tate Modern is the most popular modern art museum in the world and our aim is to make it better still. The Tate stands as a defence against all that is ugly and unimaginative in our world and is a storehouse of contemporary imagination and ideas that is open to all - no matter what age or where they come from" Chairman of Tate Trustees, John Browne said.

The opening of the oil tanks - the first phase of the Tate Modern Project - will coincide with London's hosting of the Olympics in 2012 and forms part of the larger Cultural Olympiad.

The museum is the hub of modern art in Britain and will host work from artists including Damien Hirst, Edvard Munch and Tino Seghal in 2012.

($1 = 0.627 British Pounds)

(Edited by Paul Casciato)

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