A £65 MILLION hotel planned for the heart of Edinburgh's Old Town is set to be given the go-ahead despite concerns being raised by UNESCO.

The 225-bedroom hotel - descending from Victoria Street to the Cowgate - will feature a bar, restaurant, cafe, retail and commercial units.

The crumbling 19th century, A-listed India Buildings at the top of Victoria Street is a key part of the proposed redevelopment, as is the B-listed Cowgatehead Church and a further C-listed building.

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Hundreds of jobs will be created and experts have estimated that it could be worth more than £5 million a year to the city's economy.

Developer Jansons Property managing director Andy Jansons said: "These proposals are all about preserving three listed buildings, and bringing a four or five-star hotel development to the city. There is no doubt that an additional £5.3m of annual visitor spend into the Victoria Street and Cowgate area would make a huge difference to some of Scotland's most iconic shopping areas, and another high-end hotel operator will help to further secure the city's place as a world-class tourism destination."

But objectors' concerns are focused on the new-build element planned for a gap site in the Cowgate, which would be up to nine storeys high.

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They said the new buildings - higher than the tenements which occupied the plot until the 1950s - would spoil views and block light from the next-door Central Library. And they criticised the council for selling off the publicly-owned land to the developers instead of reserving it for housing or a library extension.

Edinburgh Old Town Development Trust director Neil Simpson said: "It's too big a building and will steal daylight and views currently enjoyed by library users."

He said there had been recent plans to extend the library on to the gap site and the hotel scheme was also a missed opportunity to increase housing provision in the Old Town.

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Wendy Hebard from Grassmarket Residents' Association said: "It is definitely not the case that residents are against development but we want to see proposals that bring a substantial benefit to the local community and the city.

"We made our views known once we saw the plans and there have been over 200 objections to the scheme, yet these have been very largely ignored."

The India Buildings site is one of the "Edinburgh 12" - important gap sites earmarked by the council as key areas for development. It is understood city chiefs pushed for the plot to become a high quality hotel.

But in February, the hotel scheme was also named by Unesco advisers as one of seven developments it had "strong concerns" about.

Mr Jansons said: "Any development of the area to the rear of the library - including if the proposals were an extension - would have to address the same lighting issues."

He said if the proposals were approved, he hoped work would begin on site by January with a view to completion in summer 2018.