The new owners of the Bennions site in Newent have submitted a fresh planning application for a major sheltered housing scheme.

Birmingham-based Harper Group has decided not to use existing permission, secured by former owner Cannerton Properties, to turn the listed building into apartments and build 11 properties to the rear and five to the front.

The Harper Group's proposal, lodged with Forest of Dean District Council, is for 31 units for sheltered accommodation and seven other speculative properties, which may or may not be sheltered housing. Group technical manager Nick Bates said: "It's a complete change of plan, a complete change of use for the site."

The new application may have significant impact on the legal agreement made by the council with Cannerton, which offered funds for the community in return for planning permission. The agreement, called a section 106, was worth £30,000 and earmarked for a new Lakeside play area.

Mr Bates said this would be discussed with the council and that he expected a decision on the application by October or November. Builders could start work by Christmas.

Conversion of the listed but dilapidated Bennions building would still be a major feature of the development. Mr Bates said he expected that development of the site could be finished by December next year.

Deputy mayor Bill Offord said: "I was hoping to see some development going in there in the next few weeks. The idea of more sheltered housing is useful, but this also means a loss of affordable accommodation for young people.

"The section 106 will be under negotiation and that will delay our play area."