Plans for 500 homes in Hampshire could fall by the wayside if Home Office proposals for an asylum-seeker accommodation centre get the green light.
The centre, which would house about 400 asylum seekers for six to eight weeks while their claims were processed, could be built on Daedalus, the Ministry of Defence-owned site in Hampshire.

But Fareham council, which has jurisdiction over 160 ha of the 200 ha site, says the centre would ruin its longstanding plan to build 500 homes – 40% of them affordable – there in a regeneration project.

Council leader Sean Woodward said: "The plan for Daedalus included potential housing and other economic development. We would like to see that development in the long term. But now this accommodation centre has come forward, completely out of the blue."

In a meeting with the Home Office last Friday, Woodward raised further concerns, saying most successful asylum seekers would stay in the area after leaving the centre, putting additional pressure on overstretched council services such as housing.

The combined waiting list for Fareham and neighbouring borough Gosport, which covers 40 ha of the Daedalus land, is about 3300 people.

A spokeswoman for Gosport council said the additional burden of asylum seekers entitled to housing and wishing to stay in the area would put an "unbearable burden on resources."

A Home Office spokesman refused to comment on the meeting with Fareham council but said a decision would be reached in the next few weeks.