Plans for a major redevelopment of a private hospital have been unveiled.

Developers who want to convert the main King Edward VII Hospital into 192 flats and build a hospital next to it, have submitted a planning application.

If it is approved it means the hospital will be able to carry on treating thousands of private and NHS patients each year.

A consortium including Capio Healthcare and Lincoln Holdings has submitted the bid as part of a multi-million pound rescue package for the Midhurst-based hospital.

The charity which runs King Edward went into provisional receivership just after Christmas after a deal with a US healthcare company fell through.

Tens of thousands of people campaigned to stop the hospital closing, saying it provided a vital service to patients across West Sussex and parts of Surrey and Hampshire.

MPs raised the subject in the House of Commons and the NHS eventually threw the hospital a £900,000 lifeline to keep it going until a new buyer was found.

The new deal hinges on the planning application getting the go-ahead.

The distinctive main building, which is Grade II listed, would be used for apartments while wards, operating theatres, orthopaedic and neurology facilities will form part of the new two-storey, 120-bed hospital building.

The Macmillan Wing, which cares for cancer patients, will also be transferred to the new building.

The application includes a new patients' car park and landscaping of the site.

Lincoln Holdings spokesman Jim Byek said: "We are doing everything we can to reduce the environmental impact of this development and to ensure the new developments are in keeping with the area.

"We are committed to providing health services for patients and believe it is the best way forward."

Campaigner James Foster said he was pleased with the application but felt it might upset some residents.

He said: "That is a large residential development and it is bound to cause concern about traffic and demand on services.

"But it seems this is what we are going to have to accept if we want to keep the King Edward.

"It has a long history and is an important part of the community so anything that can be done to save it should be done."

The application is expected to be discussed by Chichester District Council on June 16.