The Observatory Tower (1936-37, listed Grade II 1971) was designed in October 1935. A Camera Obscura said to have been from a German U-Boat was installed in the tower in 1939 as noted in the 'Stop Press' section of the Fourth Edition of the Guide Book (April 1939): "A camera obscura is being installed at the top of the new lighthouse by the White Horses at the end of the old quay." The architectural form of the Observatory Tower has Clough's characteristic forced perspective and scaled-down detail to increase its apparent size. It is now surmounted by a star, however the plan shows a cut-out of a mermaid on a globe which was made but did not survive the frequent coastal gales and is now sited at the old tollgate near the entrance.
At the foot of the Observatory Tower is a Coade stone figure of Nelson (listed Grade II, 1971), given to Clough by Sir Michael Duff of Y Faenol near Caernarfon. Next to it is a weeping beech given to Clough by his friends on his 80th birthday
Clough said of the Camera Obscura, "there is still, to me, an abiding magic in being able to command at will the whole surrounding landscape to display itself in successive images in sharp detail and vivid colour on the white table before me."