Proposals for a multi-million pound regeneration of a key seafront site are set to go ahead – with the project ready to bring “massive benefit” to the resort.

Councillors will decide next week whether the scheme for the old derelict Cavendish Hotel site in Felixstowe should be used for a mix of housing and commercial outlets with just one sticking point to overcome – affordable housing.

The developers claim that the scheme will be unviable if the required 33% of social homes is provided and this was backed up by an independent analysis, though a later review contradicted its findings.

Suffolk Coastal planning case officer Lisa Chandler said at this time the affordable homes do not appear viable but to ensure the council benefits from any future uplift in housing market prices, the developer has agreed to a legal agreement to allow a profit-share to provide the council with a sum towards affordable homes.

She said: “Alternatively if it is agreed that the development can withstand an element of affordable housing provision either on-site provision or an off-site contribution will be requested.

“Affordable housing requirements are currently still outstanding and being reviewed.”

Blue Street Properties Ltd wants to build a six-storey building of 48 mostly one-bed and two-bed flats on the 1.4-acre site in Sea Road plus three commercial units – which will create around 30 jobs – at street-level, and two terraces of 11 two-and-a-half storey town houses. There will be 68 parking spaces.

Public opinion has been equally split over the scheme – with 23 objections and 23 letters in support. Concerns included overdevelopment, not enough parking and extra traffic, while the support included a letter from Colneis Junior School, where year six pupils held an assembly to explain the plans and a playground vote which resulted in 84% of the children and teachers in favour.

In a report to the district council’s planning committee recommending approval on Thursday, Ms Chandler said the site was allocated for housing in the Felixstowe Area Action Plan.

She said: “It is considered that the development as proposed will be a massive benefit to Felixstowe and will help regenerate this vacant site in a prominent seafront location.”