How to get permission to destroy the countryside: say you're building an eco-town

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A giant Swiss-based insurance company is seeking permission to build a new town of 12,500 houses in Hampshire by labelling it an "eco-town". If it succeeds, Zurich Financial Services – the sixth biggest insurance group in the world, with annual profits of $4.65bn (£2.4bn) – will be looking at a billion-pound bonanza.

Its proposed development at Micheldever Station, between Basingstoke and Winchester, would be one of the great property coups of recent years.

But local councils and green campaigners say the location, in the middle of Hampshire's rolling chalk downland, is the wrong place for a major new settlement. The scheme has been rejected out of hand four times since 1994 by planning authorities. But with the possibility of quite staggering profits, Zurich has never given up on the scheme and is now seeking a new way to get it through – by taking advantage of the Government competition for eco-towns, launched last summer as part of its new housebuilding drive.

Eco-towns are intended to be new settlements of between 5,000 and 20,000 homes where housing and infrastructure are zero-carbon, and where up to 50 per cent of the homes would be built as affordable housing. Nearly 60 schemes are understood to have been put to the Department of Communities of Local Government, with those accepted to be announced next month.

Through its English property subsidiary, Eagle Star Estates, Zurich has reworked its former proposal for Micheldever Station to fit in with the eco-town criteria, and resubmitted it. Zurich says the development, which would house 28,500 people, would be in "a sustainable location built to the highest environmental standards, where sustainable living is encouraged through innovative design".

But it has drawn the ire of environmental campaigners and local councils, who say it is simply trying to gain acceptance through the back door for a scheme which would be disastrous in landscape terms, and has been roundly rejected by the planning process – twice in the Hampshire County Council structure plan, once in the Winchester local plan and once in the South-East Regional Plan.

The leader of Winchester City Council, George Beckett, who has written to the Communities and Local Government Secretary, Hazel Blears, opposing the new application, says it is "a cynical rebranding exercise" by Eagle Star Estates.

Tom Oliver, the head of countryside policy for the Campaign to Protect Rural England, said such a new town "would overshadow a huge swathe of rural Hampshire". He added: "The site has been rejected repeatedly as a possible major new development and has only returned as a figment of corporate opportunism. To decorate this proposal with 'eco-bling' is cynical and undermines the credibility of the Government's eco-towns competition."

Tony Burton, the director of policy and strategy at the National Trust, said: "It doesn't matter how much energy efficiency and water- resource management it has, that can't make a development that's in the wrong place suddenly be in the right one."

Yet the enduring attraction of the scheme for Zurich is obvious. It owns all the land concerned, which is part of a 10,000-acre estate bought by Eagle Star Insurance (later taken over by Zurich) from Lord Rank in 1975.

According to the local amenity group, the Dever Society, which has spoken to people involved with the sale, the price paid then was £500 an acre. But now land agents say that land in the area with planning permission is worth between £1m and £1.25m per acre – "£1.1m per acre would be a good average," said Tim Gardner, of the agents Ian Judd and Partners, in Bishop's Waltham, near Winchester.

It is thought that about 970 acres of the 1,250-acre plan would be given directly to house-building (with the remainder used for parkland, roads and recreational space). At £1.1m per acre, 970 acres would be worth £1.067bn, for an original cost of £485,000.

Bill Bromwich, a spokesman for Eagle Star Estates, declined to confirm or deny the figures. "This is very much confidential information, which I'm not allowed to divulge," he said.

Advice on the proposal from the Government's landscape and wildlife watchdog, Natural England, has so far been confined to confirming that that there are no statutorily protected sites involved.

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