Oh dear! We have the same type of fireplace, except mine is double brick. I think you should definitely paint the cavities the same colour as the walls, the existing colour seems to chop it up and makes the area look smaller. I love the idea about the stone look wall paper around the fire. I would check with manufacturers instructions beforehand, fires put out a lot of heat and ash and my guess is that it would ruin the wall paper (you didn't mention if your fire was real or gas log). I think Mitre 10 and Bunning's sell a product that's stone cladding ( its DIY) you glue it onto the wall, it looks amazing. A timber mantle above the fire would also look great. My fireplace has shelving either side in the cavities, it seems to balance it out otherwise you have 2 great big empty areas. You could align the shelving or stagger them depending on what look your after. If you go with the shelving idea I would put a couple cushions each end of the cavities near the ledge to encourage people to sit. Fires are meant to be warm and inviting. Lastly I would put a rug in front of the fire to protect your carpet. Good luck! Make sure you post some pics.

Thanks to everyone for all your helpful comments. As much as I'd love the light airy style kitchen with the light grey benchtops, I've decided to go with timber as it will stand up to my boof head hubby, he is just too heavy handed to trust with a laminex benchtop, if he does cause any damage we can just sand and re-oil and will be good as new. I also felt timber on my desktop (area on the side) would be warmer and more welcoming as I work from home and the thought of a cold laminex desktop wasn't appealing. I will try to counteract the over abundance of timber with white splash back tiles and lighter floors when we redo those, hopefully that will lighten it all up a bit. The buffet in the dining is going and will be replaced with something in a lighter tone so that will cut down on the timber as well and the stools will be painted to match the cabinets. I'll more than likely do away with all the timber furniture and go lighter soon anyway....a change is as good as a holiday they say, and I can't afford a holiday now I've got a new kitchen so..... I'll post photos of the finished product but thanks for all your help.

Hi, where do you live? If you're in Melbourne, this place was just amazing: http://www.urbanedgeceramics.com.au. There is a lot here that is certainly upper price ranges, but there are also more affordable options (i.e., that are equivalent to the mainstream shops - where our range was firmly placed!). They'd be able to show you all the Marrakech/Moorish/etc., themes they have to help you decide. The show room is a little like a gallery..... Good luck.

Thanks Tim! We appreciate the feedback.