An application was made this month by developers Raven Audley Court for work to start on the £18million project once the North Leaming-ton School sixth form has moved to its new site in the autumn of 2009.

But while authorities are happy the listed building will be maintained by the project, they are concerned that the residential institution will only cater for private residents and not bring in more affordable housing for those aged over 55 in Warwick district.

Ward councillor Cymone De-Lara-Bond (Lib Dem, Leamington Manor) said: "The development will be an improvement to the building - some of the add-ons made in the 1960s are going so they are certainly going to look after and restore the building to a much improved design.

"But it won't have to make any contributions to affordable housing or social housing in the district and that is the part I'm disappointed about."

After meeting with the prospective developers, adult health and community services project leader Tim Willis said: "Although the application for extra care housing is welcome in that if successful, this will go towards meeting the needs of some older people in the district, it is disappointing to discover that the proposed development is only aimed at private funders.

"However, although Binswood is unlikely to meet the housing needs of our customers at the present time, there is an opportunity for the local community to access a number of facilities on the site, including the provision of residential care in the future.

"It will be interesting to see how the application is received by the district council in light of the current housing moratorium and the need for affordable housing to be developed."