A FAMOUS cafe once popular with Ernest Hemingway and Ava Gardner is to be saved after a  rival bid for the use of its terrace was withdrawn.

Cafe Gijon in Madrid was on the brink of being closed down after the town hall granted the license to a firm which bid twice as much to use the space.

But the company withdrew its offer amid economic concerns and uproar over the closure of the 120-year-old cafe, which relies on the iconic terrace for 70 per cent of its income.

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