CAMPAIGNERS have reacted with anger after land earmarked for one of Edinburgh's highest-profile developments was bought over by a company registered in a tax haven.

Edinburgh's historic India Buildings are set to be turned into the first Virgin Hotel outside the US, with global tycoon Sir Richard Branson hailing the move last month.

But critics have condemned the scheme, insisting the blueprints encroach on land initially set aside for an extension of the neighbouring Central Library.

Much of the plot was previously publicly owned, before being sold off by the council in a bid to kickstart development in one of Edinburgh's most strategically important gap sites.

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Now it has emerged the land was recently bought over by a shadowy firm registered in Guernsey - condemned by campaigners as an "offshore secrecy jurisdiction".

It comes amid growing calls for Scotland to open up its registers and provide the public with full and free access to land ownership information.

Green MSP Andy Wightman - a longtime supporter of land reform - said some of the site sold off by the council could have been considered "common good land", held for the common good of Edinburgh's inhabitants.

He said: "It comes as no surprise to find that a vitally important piece of public land, part of which was common good land, has been sold off and now finds itself further transferred to a company in an offshore secrecy jurisdiction.

"It is time to end the sale of strategically important public land and, instead, rediscover the spirit of municipal enterprise which historically delivered high-quality developments across Edinburgh."

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Records show a company called "India Buildings Ltd" took over ownership of the proposed Virgin Hotel site, just off Edinburgh's Victoria Street, at the end of last year.

The firm is registered at an address in the Channel Islands, and lists its director as another company called "Trident Corporate Services (No.1) Limited".

Developer Dreamvale Properties, which is advancing plans for the 225-room Virgin Hotel, refused to reveal who ultimately owns India Buildings Ltd.

Simon Byrom, a campaigner who previously camped in a tree to try to stop the development going ahead, branded the move a "terrible disgrace". He argues some of the land sold off by the council was originally set aside for an expansion of Edinburgh's Central Library, which opened in 1890 as one of the world's first Andrew Carnegie libraries.

The activist, who lost a court case over the issue last year, added: "It brings great shame on Edinburgh Council."

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Elspeth Wills, chair of Grass - the local residents' association - questioned how the surrounding community can benefit from the project "if profits go offshore and purchasing is likely to be centralised in the UK or even the USA".

She added: "When Virgin announced in the press that 'involvement with the community was a vital part of Virgin Hotels plans', we wrote to Virgin introducing ourselves. We are still awaiting a reply."

Sir Richard Branson called Edinburgh "an iconic city" as he announced his plans last month.

A spokesman for Dreamvale Properties Development Ltd said: “Dreamvale is a UK company and acquired India Buildings and the council’s landholding to help realise the vision to bring a new five-star hotel into the heart of Edinburgh’s Old Town.

“We are delighted that Edinburgh will be the home of the first Virgin Hotel in the UK and across Europe. We've all worked hard to ensure that the proposals regenerate this part of the Old Town and restore the three listed buildings on site.

“These include the iconic India Buildings, which is one of the most prominent buildings in Edinburgh on the 'at risk' register. We will continue to work with the local community to maximise the benefits of the proposals for local residents and businesses.

“Doing so is a complicated and demanding task, and our plans are to maximise the resources available for full restoration and regeneration, and to enable us to open the new hotel in 2020.”