The huts on Weymouth's Esplanade, in Dorset, need more than �103,000 in repairs and could be demolished to make way for restaurants and toilets.

The report, by officers at Weymouth and Portland Borough Council, admits the council failed to invest more than �800,000 in repairs in the last decade.

One recommendation is for the historic chalets to close down in March 2008.

That is when the current leases run out, at which time the council should secure funding to clear or redevelop the site.

'Prime location'

But the report also said the chalets "were seen as an important element of the resort".

"One of the clear implications is that if the council cannot manage and maintain them effectively, then consideration should be given to passing them over to an external body to manage, possibly a private operator or a trust," it said.

It added there was "resistance to the council disposing of the assets all together partly because they are located in an area which is dedicated principally for the benefit of the community yet also occupying a prime location in the town".

The report into the Weymouth block, which contains 107 huts at Greenhill Beach, will go before the council's community regeneration and culture committee on 22 February.

The demolition plans are one of a number of ideas to regenerate the area.

An alternative is to renovate the huts and let them out at a premium rate for 25 years with licensees taking over responsibility for repair work.