UP to 200 hundred homes could be built on unused land at a flagship Newport business park as its owner seeks to safeguard its future.

A 17-acre site at Lakeside Drive, on the Celtic Springs Business Park, close to junction 28 (Tredegar Park) of the M4 is being proposed for the development by Anglian Water Group (AWG).

The site, bordered to the north by the EADS defence and security systems complex, and to the south, partially, by the Dragonfly pub, is designated as commercial land.

But despite early success in attracting businesses onto the park, in recent years AWG has struggled to fill remaining office space and secure a use for the vacant land.

Economic downturn, competition from Cardiff, an oversupply of office space in the area, and a shift of emphasis by Newport council toward trying to attract firms into the city centre, are cited as having had "a stagnating impact."

Around £1.2 million has been spent on what a planning statement accompanying AWG's recently submitted application for outline planning permission for the homes describes as "significant infrastructure and landscaping works" along with the development of a 54,000 square feet office building which has been vacant since completion six years ago. The site has also been continuously marketed.

Now, that planning statement is also warning that, with a considerable amount of office floor space remaining empty "this is having a major drain on resources and has significantly affected the financial viability of the business park as a whole."

Alternative options for the development of the application site need to be considered, it continues, "to ensure the longevity of the park as a whole is safeguarded."

The housing proposal is supported by a landscaping scheme designed to provide buffers from existing office developments. It is considered by AWG to ensure the best and most efficient use of land that it cannot otherwise guarantee will be occupied anytime soon.

It will also, according to AWG's planning statement, contribute to the requirements for new homes in Newport, required as part of the Welsh Government's objectives for housing across Wales.

Tony Donnelly, managing director of AWG Property, said that realistically it would be "a long, long time" before the site could be developed for business purposes.

"It struck us that a residential development on the park would be quite a neat fit, to give Celtic Springs a village feel," he said.