The future of an historic former hospital is to be considered this week.

Developers want to convert the old King Edward VII Hospital in Midhurst to create houses, a shop, meeting area and leisure facilities.

The Grade II* listed site is in an area of outstanding natural beauty and includes historic gardens created by pioneering landscaper Gertrude Jekyll.

The private hospital, which also dealt with hundreds of NHS patients from across West Sussex and parts of Hampshire and Surrey, closed a year ago.

It went into provisional liquidation at the end of 2001 after debts spiralled to more than £8 million.

Tens of thousands of people signed a petition to save the hospital and the subject was brought up in Parliament because of fears the closure would lead to longer waiting times for NHS patients.

A rescue package was drawn up by developers Lincoln Holdings and the healthcare company Capio which would have included a new hospital houses but this fell through in 2006 after they could not agree on how to take the plans for the site forward.

Around 300 jobs were lost and patients had to go elsewhere for treatment.

The plans involve created 224 homes by converting the listed buildings and creating 38 flats within a new wing.

Thirty-two of these flats will be affordable housing.

There are also plans for a new on site shop together with new indoor and outdoor leisure facilities, a business area and the restoration and protection of the gardens and grounds.

A report to a Chichester District Council planning committee being held on Wednesday (apr 11) shows general agreement there should be some development of the site to protect the historic buildings but there are concerns about the number of homes planned.

Objectors want a full assessment carried out to check whether the number proposed could be reduced even further.

Other concerns raised include he impact the extra traffic will have on the roads, the lack of public transport available in the area and whether local medical facilities and car parks could cope with the extra demand.

Margaret Hayes, 55, from Midhurst, was one of the original campaigners who fought for the future of the hospital.

She said: "It seems the most logical step as long as there are not too many houses as it is important to protect the building.

"However I am still bitterly disappointed the hospital was lost. It had a lovely atmosphere and was very special to a lot of people."

Planners are recommending committee members should accept the application but defer it at first until a legal agreement is reached over how facilities such as road safety measures and public transport are provided.