The Westminster guarantee of £86m means Stewart Milne Group can now deliver new housing, schools, healthcare and parks at the Countesswells site.

Countesswells will comprise 3,000 homes, of which 750 will be affordable, along with the infrastructure required to support the community that will include schools, informal and formal parks, leisure and healthcare facilities.

The development will be phased over 15 years, boosting the local economy and supporting 1,000 construction jobs in the region.

The guarantee works by providing a state-backed guarantee to help projects access finance. It will enable funds to be raised from the Capital Markets, issued as revolving Loan Notes, to support the infrastructure project at Countesswells. The Funder for the Countesswells development will be Bank of Scotland, who has worked alongside Stewart Milne Group and HMT to create long term lending for the life of the project.

Scotland Office minister Andrew Dunlop said the guarantee was “a vote of confidence in the North East”.

He said: “This is a great example of partnership working where the government can unlock the capital and the potential of the development.

“This part of Scotland is facing some stiff challenges but today’s announcement is a vote of confidence in the North East by the UK government and those involved in the project.”

John Slater, group managing director of homes at Stewart Milne, added: “It is a critical project for the city over the next 15 years, delivering much needed homes and community facilities that in turn will compliment Aberdeen’s economic growth.

“We have worked for many years to bring Countesswells forward and the 3000 new homes will play a major part in meeting the housing needs of the city and the aspirations of the local community.”

Planning permission in principle for Countesswells was granted by Aberdeen City Council in October 2014, subject to final agreement on developer contributions for infrastructure. Detailed planning consent for the first phase of infrastructure was subsequently granted by the local authority.

Mobilisation and compound facilities will start this month and infrastructure works will begin in April with first homes available later this year.