Neighbours rage at Fritzl's plan to build new flats

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At first glance, the sophisticated architectural plans for a dozen or so modern flats, an underground garage and an office block with big city-style mirrored windows seemed to hold out the promise of long-awaited metropolitan flair for the Austrian country town of Amstetten.

However residents in the provincial backwater, 60 miles west of Vienna, have been horrified to discover that the ambitious scheme recently ratified by the town council has been conceived by none other than their most infamous fellow citizen: Austria's so-called "incest monster" Josef Fritzl.

Seventy-five-year-old Fritzl is serving a life sentence in the country's Stein prison. During a spectacular trial last year, he was convicted of holding his daughter prisoner in a cellar beneath his Amstetten home for 24 years, raping her an estimated 3,000 times and fathering seven children through the incestuous relationship.

It emerged this week that, prior to his conviction, Fritzl spent some €160,000 (£140,000) on buying up land located only 600 yards from his cellar. He applied for planning permission for his office and flats scheme in 2006 – two years before he was caught.

Amstetten residents have since been appalled by the news that their town council has routinely given its approval to the project which has been ardently pursued by Fritzl's insolvency lawyer, Walter Anzböck. Officials studying the development apparently had no objections to the scheme and rubber-stamped it after agreeing it appeared to fulfil the statutory requirement of fitting "harmoniously" into the area.

Mr Anzböck insists he has been obliged to follow through with the project in order to satisfy the financial demands of Fritzl's 21 creditors who want to recoup the estimated €3m they are rumoured to have invested. "Fritzl won't earn a cent out of the development and he has nothing to do with the current negotiations," he said this week.

However Amstetten's residents are furious. "Fritzl had done so much damage to our town's reputation," said Otto Popp, a pensioner who lives close to Fritzl's proposed development site. "He cannot be permitted to erect a monument to himself in Amstetten. He is utterly despised here." His son, Jürgen, has joined with other residents in a bid to stop the scheme. The town council has yet to respond to their appeal.

Fritzl, who was forced to declare insolvency from his prison cell, was a property dealer before his arrest and owned several houses in Lower Austria. He now faces six-figure legal costs for his trial and has been ordered by the courts to contribute to the medical costs of his victims.

His lawyers had held out the faint hope of finding a buyer for Fritzl's former home. Mr Anzböck told Germany's Der Spiegel magazine this week that a few interested parties had offered to buy the house complete with its cellar. They were turned down because of fears they wished to use the building as a macabre tourist attraction. He said there were now plans to demolish the house.