4-Methyl-1-indanone on condensation with 2-lithio-N,N-diethyl-1-napthamide and 2-lithio-N,N-diethyl-8-methoxy-1-napthamide, followed by hydrolysis afforded 2-(1-hydroxy-4-methylindan-1-yl)-1-naphthoic acid lactone and 2-(1-hydroxy-4-methylindan-1-yl)-8-methoxy-1-naphthoic acid lactone respectively.