A HERITAGE watchdog has criticised a move to lease and then hand over a publicly owned Royal Mile landmark to a property mogul .

The Cockburn Association has called for a trust to be set up to protect public buildings in the the Scottish capital from being "sold off for private profit" after being judged to be surplus to public needs with plans for the latest building to be offloaded - at 329 High Street - to be turned into serviced apartments and a restaurant.

The developer behind the project, Christ Stewart, has a £45m award-winning development at the neighbouring Advocate's Close, and is also behind the £65m Registers historic buildings renovation - which includes an art deco banking hall - at St Andrew Square in the city with offices and street level shops, bars and restaurants.

The 58 staff at the seven storey, A-listed property at 329 High Street, which is joined to the city chambers, will move to nearby offices and the renovated building will be designed to form part of the existing apartment, leisure and business complex at Advocate's Close.

Marion Williams, Cockburn Association director, raised concerns over the transparency and fairness of the High Street deal after it emerged the building had not been marketed by Edinburgh City Council, and she called for publicly owned historic buildings to be better safeguarded.

The council said leasing then handing over the building to developer Chris Stewart, and separately the long term lease of the Lothian Chambers to the French Consulate, would bring more than £7m in the next year and mean savings of £170,000 a year on running costs for both properties.

Any annual income during the lease and how long this is envisaged to be, as well as how much of the £7m will come from the High Street property, is "commercially sensitive information", the council said.

Proposals have been put together but outline plans have not yet been lodged with the planning department.

The council said it would achieve market value for the building and gain "additional marriage value" which it said is "the value of the two assets is higher than the individual values of both thereby creating additional value which is traditionally shared between the parties".

Ms Williams said: "There is a lack of transparency and fair play here.

"The publicly owned buildings should remain so.

"A trust needs to be set up to safeguard them and put them to public use whilst generating sufficient income to maintain them, not sold off for private profit."

There has also been opposition to the transformation of the former registry office at India Buildings in Victoria Street into a 225 bedroom hotel, while the having the French Consulate as tenant in Lothian Chambers opposite is "a good fit and also keeps the building in public ownership".

The 329 High Street building would have been expected to have received similar interest to the lease of Lothian Chambers which it is understood had approaches from the Church of Scientology, a casino and a major store.

A report to the council stated: "Following the acquisition of the former council owned properties at Market Street, Cockburn Street and Advocate's Close, the Chris Stewart Group has undertaken a multi award winning £45m mixed use redevelopment, providing office, retail, leisure and serviced apartment uses.

"The Group has approached the council on the basis that their ownership extends up to the boundary of Roxburgh Court, which adjoins 329 High Street, as an adjacent proprietor.

"Outline proposals have been produced for a high quality serviced apartment development and how this will directly link, and act as an extension, to the existing Advocate's Close development.

"It is expected that the proposals will produce a return in excess of market value due to the share of ‘marriage value’ created.

"The proposals would initially be a long lease, to ensure the proposed development was delivered, but would eventually convert to outright ownership once complete."

A spokesman for the council said: "No planning application has been submitted to date.

"No marketing has taken place and the proposed disposal is to an adjoining landowner due to the creation of additional marriage value."

The Chris Stewart Group (CSG) said renovations put forward are "aligned to the council's improvement strategy for the Royal Mile, and CSG will lease the building whilst it undertakes renovations to allow the council close access to the development plans and progress".

The Advocate’s Close regeneration project has created a new 208 room hotel, 50 serviced apartments, restaurant space and office accommodation from a mix of 11 different tightly packed buildings.