A DEVELOPER hoping to build sheltered housing on a former garage complex has been denied permission because it would not stump up almost £1m for affordable housing.

The dispute centres on plans for the former Octagon Garage in George Street, Warminster.

Planning permission to develop the land to create 38 sheltered apartments, house manager's accommodation, communal facilities and car parking was granted by West Wiltshire District Council in August 2005. A legal agreement meant the two sides then had to decide on how much the developer should pay towards affordable housing elsewhere in the district.

The district council initially asked for £770,000, but later upped its demands to almost £1m.

McCarthy & Stone, who were only willing to offer up to £330,000, lodged an appeal with the Planning Inspectorate. Now inspector Jane Miles has ruled in favour of the council following the appeal, which was heard in August.

Dismissing the appeal, Ms Miles said a figure based on the equivalent of 12 affordable homes, without any public subsidy, would have been "appropriate and reasonable".

The council's policy states there should be 30 per cent of affordable housing for any development of more than 25 units or one hectare in size.

Cllr Jeff Osborn, district council's planning and development portfolio holder, said the inspector's decision validated the authority's approach to affordable housing.

He said: "We all want to see this important site in Warminster redeveloped as soon as possible, but the developers in this case knew from the outset what we would require from them."

Housing portfolio holder Cllr Tom James added: "The inspector emphasised that the need for social rented units constitutes some 87 per cent of identified need in the district, which highlights the importance of our policy.

"With our housing register growing by the day, we have to seek the maximum affordable housing development whenever we can."

McCarthy & Stone has submitted a second application for the site, for 23 flats.

This application was refused by the district council and an appeal will be heard in January. The number of car parking spaces and not affordable housing is the stalling point with this application.

Paul Davies, a spokesman for McCarthy & Stone, said: "We will be pursuing the alternative proposal which will eliminate the affordable housing element as it falls below the council's threshold. We will be representing this application strongly at appeal."

Mr Davies said the firm and the council were poles apart in what they felt was an appropriate cash sum for affordable housing.

He said: "The original contribution they wanted was almost as much as the land was worth. The council was a long, long way out from what we considered the norm for affordable housing contribution."