The preferred option to emerge from a feasibility study into the future of the Georgian landmark would see the building become a hub for heritage, culture, the creative industries, retail, hospitality and the local community under the plans.

The property was sold to the City of Edinburgh Council for £650,000 in 2015 before it was leased to the Scottish Historic Buildings Trust (SHBT).

SHBT and the council tasked Richard Murphy Architects with carrying out the study to develop a long-term masterplan for Custom House back in 2019.

A report is set to be discussed by the council’s Culture and Communities meeting on Tuesday.

The report states: “During development of the study it became clear that the level of external funding for a capital project for a single use community option, such as a museum project, would be extremely challenging to achieve and that the revenue costs associated with such a venture, likely requiring significant third-party subsidy, would make this particular option unsustainable. The council has confirmed it is not in a position to develop or operate another single use museum of a scale of the entire Custom House building. To date no other third party, with a proven track record of delivering and operating a venue of the scale of Custom House has been identified.

“The feasibility study therefore investigated a ‘hybrid’ building use. It is however central to the Custom House development to incorporate some form of heritage display provision which would allow significant access for the community and visitors in the proposals.”

SHBT chair Maggie Wright said: “We welcome the paper being presented to the council’s committee, which will consider the outcomes of the feasibility study to provide a long-term vision and sustainable future for Custom House, giving it back its rightful place within the heart of the Leith community.”

A council spokeswoman added: “The preferred development option to ensure the future of this important, category A-listed building in the heart of Leith community will create an open and welcoming building, whilst generating sufficient commercial income to ensure it has a sustainable future.”