The nuns of St Geroge's Retreat hope to help beat the bed-blocking crisis by creating Britain's biggest care community.

Across Sussex, hundreds of nursing and retirement homes are being forced to shut because they cannot afford to comply with new government regulations.

Not only is it making things harder for elderly people already cared for, who suddenly find themselves homeless, but it is putting further strain on hospitals and delaying operations.

More than 100 mostly elderly patients, who no longer need hospital treatment but have nowhere else to go, regularly take up beds in the Brighton hospitals and the Princess Royal at Haywards Heath.

However, the nuns at St George's Retreat in Ditchling hope plans to create more than 200 retirement flats, nursing home beds and close-care accommodation facilities will help alleviate the problem.

The proposals have already received the approval of Lewes District Council and former prime minister Lord Callaghan, whose wife of 60 years, Audrey, is cared for at the site's current 190-bed nursing home.

Sister Mary Thomas said: "At the moment we have 190 residents with dementia or disabilities.

"Three years ago we decided the house would not meet the new standards so we came up with the idea of continuing care."

The first part of the development is a plan to turn St Mary's house, which is on the same site, into a 60-bed nursing home and a 113-bed close-care accommodation block.

The existing St George's Retreat would be converted and redesigned to provide residential accommodation and 149 flats and houses would be built on land behind it.

Sister Thomas said: "The idea is once people move in they will have a lease for life, so if there is a need for them to move from the flat to nursing care, then they can.

"There will be various levels of care delivered. There are a lot of people in hospital who, if they were in an assisted living environment, could be quite independent.

"We are delighted it has been agreed by planners. It is a good start."

The retreat is losing about £1 million a year and it is hoped the development will put a stop to this drain.

The sisters took inspiration from Hartrigg Oaks, which was built in Yorkshire in 1998. It is the first continuing care village in Britain and widely seen as a good model.

Sister Thomas said: "I think it is the way forward. Hospitals are becoming more like nursing homes because of bed-blocking.

"Elderly people are looking for security and it is nice to know once you move in you do not have to move too far when you need nursing care.

"It would be a very exciting venture for this part of the country.

"People can move in with their partners so as they get to the end of their lives they can still be together in the same area.

"It has been a great relief for our staff because it is their future too."

Stuart Warren, property manager at the retreat, which already employs about 300 people, said: "The big problem with nursing homes is they are very institutional and you rarely get a husband and wife being allowed to stay together - but this development will allow it.

"It is going to take about one year after we get approval from the Secretary of State. We have still got to do more detailed planning."

Mr Warren said he sympathised with smaller retirement and nursing homes which were being forced to close because they could not afford to meet the new regulations.

He said: "The property value here means the land is worth much more to a developer than keeping places open as nursing homes."

The plans have been welcomed by many who see it as a significant step towards solving the crisis in finding care for the elderly.

Ian Keeber, spokesman for the Brighton and Sussex University Hospitals NHS Trust, said: "It is a dramatic and called-for development. It is exactly the sort of thing we need.

"When we look at getting people out of hospital it is not because we don't want them. People are better off at home.

"In hospital, they are more likely to pick up infections and mentally it is far more appropriate that people are in an environment they consider to be home.

"Also, if we can get more people out of hospital, we get more people in hospital at the other end.

"We occasionally have huge queues in casualty at the Princess Royal and the Brighton hospitals."

Last year, under government performance targets, the Princess Royal got just one star and Brighton General and the Royal Sussex were not awarded any, which Mr Keeber attributed mainly to waiting times.

"The problem in the South-East is very acute. Almost all the no-star trusts are in the South-East.

"Brighton has lost something like 25 per cent of all its nursing homes places in the last year.

"It is too expensive and nursing home owners can get more money selling the land to developers.

"It is one of the biggest problems so anything that can help is fantastic.

"Anything which is going to support people staying in their own homes or in a supported environment we will look at with great interest."

A spokeswoman for Brighton and Hove Primary Care Trust said: "Accommodation for the elderly is shrinking, particularly for those with mental health problems such as dementia.

"Private homes are closing so any additional provision is bound to be useful.

"It sounds a very imaginative idea and it will be interesting to see how it goes."