YORK'S British Sugar site could be used to create affordable family housing as well as new jobs when the factory closes next year.

Council chiefs and British Sugar bosses plan to work in partnership to decide on the best use for the future of the site in Plantation Drive after its closure, which is expected before Christmas 2007.

British Sugar's 100-acre site, which could be worth as much as £80 million, could also be used to provide more community facilities on the west side of York.

The suggestion was made at a meeting between City of York council chiefs and directors from British Sugar at their Peterborough headquarters, which was attended by council leader Steve Galloway, Chief Executive David Atkinson and Strategy Director Bill Woolley.

Mr Galloway said: "The intention of the meeting was to seek British Sugar's support for a partnership approach to the future use of their Boroughbridge Road site.

"Although British Sugar indicated that their refining plant would indeed close finally before Christmas 2007, they expressed a willingness to work with the council to ensure that their site was used effectively for the benefit of the city and its economy." He said the directors had expressed a "strong interest" in working jointly with those involved with the development of the York Central site. The Press told last week how the multi-million pound project to revamp more than 70 acres of York brownfield at York Central was likely to be put on hold until the future of British Sugar was resolved.

The factory and the York Central teardrop site are very close to each other and of similar size.

They could provide similar housing and employment opportunities if the Plantation Drive site was ever to hit the market.

Mr Galloway said: "They accepted that there could be benefits for the city generally and the land owners if the two sites were developed in a mutually compatible way and to an agreed timetable.

"I have offered the company the support of the council in dealing with issues arising from their closure decision.

"I am hopeful that, in time, the Boroughbridge Road site will provide not only additional employment opportunities for the city but also will help to satisfy demand for family housing and improved community facilities on the west of the city.

"We are establishing a regular dialogue with the company and expect to meet with them frequently over the next few months".

Members of the council's ruling executive will be asked at a meeting tomorrow to suspend work on the action plan on the grounds that it would be "inappropriate" given the "potential implications that the British Sugar site may have for the York Central area".