The local authority is seeking planning permission in principle for its masterplan for land north east of Blar Mhor Industrial Estate at Lochyside.

The land was acquired by the council for £2 million in 2015 from Tesco after the retailer abandoned plans to build a store.

Working with NHS Highland, the council has proposed building a replacement to Fort William’s ageing Belford Hospital.

In the design statement prepared by agents Inverness-based Threesixty Architecture, it is stated that the project will be carried out over a number of phases.

The first phase is likely to be a residential development of up to 125 units. It is intended that this will begin next year. Timescales for the hospital part of the development are unknown.

Housing is to be a mix of flatted, semi detached or detached homes ranging from one-bedroom to four bedrooms in size. There will be groupings of single storey bungalows and clusters of three storey flats.

It will be a range of low cost ownership, mid-market, or social rent and private. A minimum of 25% of the homes will be affordable, however this is likely to be up to 100% in the first phase, the statement claims.

A spokeswoman for Highland Council said: “The Highland Council has invested £2m in the purchase of the Blar Mhor site to make provision for a new hospital for NHS Highland and potentially a new science academy for the West Highland college. This project will eventually enable the building of affordable housing and business opportunities on the current site of the Belford Hospital.”

Minister for housing, local government and planning, Kevin Stewart, said: “Fort William has a growing population. It has already had major investment in terms of housing from the Scottish Government and we are keen to see more housing in Fort William to keep up with the economic growth that is taking place in that area.”

A date for the masterplan to go before the planning committee is still to be fixed.