Hundreds of jobs could be created under plans to revitalise an area hit by the recession.

Developer Avalon LLP has revealed plans to build a 40,000 sq ft Asda store in Newhaven which they estimate would generate around 350 jobs.

The proposal, in conjunction with Asda and Barrett Homes, would also include a hotel, 14 business units and 280 homes on the unused Eastside site in the town.

Newhaven has been hit particularly hard by the recession with the loss of Woolworths and news of the closure over the Parker Pen factory.

Around 180 jobs will be lost when the world famous factory shuts.

In January developer Oakdene Homes collapsed, midway through its multimillion pound regeneration project at Newhaven harbour.

Lewes MP Norman Baker said he supported the proposals so long as the public backed it.

Mr Baker, who has been in contact with Avalon in recent months, said: “I think it's important to attract as much investment as possible. Newhaven is having a hard time with the recession, more than other towns in my constituency. The creation of jobs here is very important.

“The Parker Pen issue has not helped and the town has suffered unconnected but significant big blows.”

However Mr Baker said that he had reservations about whether Asda would crowd out other stores in the town centre.

He said: “The only issue for me is whether the creation of a new supermarket would be a fatal blow to Somerfield and whether that is a sacrifice too far in the town centre.

“I would like to get the views of the people of Newhaven and will be guided by them.”

Avalon spokesman Matt Davies said: “This is an important development for Newhaven and that is why we want to work with the local community and stakeholders to get it right.

“At this difficult economic time when many regeneration projects around the country have been put on hold, we want to deliver a scheme that meets the needs of Newhaven and one that can be delivered in the short term.”

Avalon is yet to apply to Lewes District Council for planning permission.

Councillor Peter Gardiner said: “We are keen to see redevelopment and we are also keen to have affordable homes in the town.”

A public exhibition will be held by Avalon next month to attract feedback on the proposals.

The Avalon plans will go on display at the Hillcrest Centre in Hillcrest Road, Newhaven, from 10am to 5pm on September 4 and from 10am to 1pm on September 5.