Plans for Strathmartine Hospital in Baldovan, to the north of Dundee, had originally been approved by Angus Council despite strong opposition from neighbouring Dundee City Council on the grounds that the number of new homes was “excessive and not justifiable”.

Dundee City Council claimed the plans to build 198 homes and convert the B-listed main building into 24 flats were in potential conflict with its own 20-year housing strategy.

Angus Council’s decision was then called in for further scrutiny and determination by Scottish Government ministers on March 31 this year.

An inspection was carried out by Scottish Government reporter Allison Coard in May.

Based on Ms Coard’s findings, the plans submitted by developer Heathfield Ltd have now been approved subject to certain conditions being met.

A letter from the Scottish Government’s directorate for communities planning division states: “Scottish Ministers hereby give notice that they are minded to grant planning permission in principle for the redevelopment of the former hospital site to include new build and conversion to residential and community use and crèche, associated access, landscape and infrastructure works at former Strathmartine Hospital, subject to conditions and to the satisfactory conclusion of a planning obligation or suitable alternative binding agreement.”

The building, also a former orphanage, has lain empty since 2003 and has become increasingly dilapidated, with fires in 2010 and then in April this year causing major damage.

The plans would include the retention and conversion of the B-listed building, which served as the hospital’s administration building and pavilion ward blocks, into 24 new flats.

Two existing residential cottages would also be developed into two larger properties and a chapel on the sprawling grounds will be repaired in order to create a crèche and community building.

The majority of the new homes would be built within the grounds of the 44-acre site.

The site was originally home to the Baldovan Children’s Institute, which was established in the 1850s to act as an orphanage, hospital and school for children with learning disabilities.

The main building was erected in 1901 and further wings were built in the 1920s and 1950s.

In 1964, the orphanage moved and the Strathmartine Psychiatric Hospital was established.