An order of nuns has been given permission for a multi-million pound retirement village it hopes will ease its crippling financial problems.

Plans to expand St George's Retreat in Ditching into Britain's biggest retirement village got the thumbs-up from Lewes District Council earlier this year.

But the proposals, which includes more than 200 retirement flats, had to be put on hold while they were referred to the Secretary of State for scrutiny.

The nuns have been told they can develop the site.

It is hoped the move will help stem the retreat's £1 million-a-year losses.

The proposals, at an estimated cost of £40 million, include turning St Mary's House into a 60-bed nursing home and a 113-bed close-care accommodation block.

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

Stuart Warren, property manager at the retreat, said: "We are delighted with the decision from the Secretary of State.

"It is very exciting and we are itching to get started on the expansion."

The last hurdle is a Section 106 agreement with Lewes District Council, which wants the retreat to help make changes to the transport network in the area before building can start.

This includes widening roads for the anticipated increase in traffic, improving bus stops, and putting extra lanes in the B2112 between Wivelsfield and the Ditchling Road.

Mr Warren said: "We are still in talks with the council. But, fingers crossed, it will get sorted out quickly so building can start by next summer."

The retreat has cared for people in Sussex for more than 100 years and was built for mental health patients by the Augustinian Order from Belgium in the 1860s.

It is already used as a nursing home for 190 people and has 300 staff.

The nuns decided to revamp the facilities after the Government introduced stringent regulations about room sizes and staff training.

It is hoped the development of retirement flats will help pay for the changes.

The sisters took inspiration from Hartrigg Oaks, in Yorkshire, the first and biggest continuing care village in Britain.

Support has also come from former prime minister Lord Callaghan, whose wife of 60 years, Audrey, has been cared for at the nursing home.