The original red brick officers' mess could be turned into apartments

Castle Court, a �30m all-year-round tourism and leisure development will be created on eight acres of derelict land next to Portland Castle.

It will be transformed into shops, restaurants, apartments and a hotel.

The facility will support the 2012 Olympic sailing events at the nearby Weymouth and Portland National Sailing Academy at Osprey Quay.

The South West Regional Development Agency (SWRDA) acquired the site after the Royal Naval Air Station closed in 1999 with the loss of 800 jobs.

The agency said the Castle Court development, in partnership with the Sutton Harbour Group, is expected to create up to 300 new jobs and will provide a permanent base for the Royal Yachting Association's national squads.

'Higher wages'

The development will also offer leisure activities both on and off the water around Weymouth and Portland, including sailing, rock climbing, diving, walking and fossil hunting along the Jurassic Coast.

Geoff Petherick, of Weymouth and Portland Borough Council, said: "There is currently in the region of �400m worth of regeneration projects and investment, either in place or in the pipeline for the borough.

"As part of the legacy from hosting the sailing events for the London 2012 Olympic and Paralympic Games, we are looking to attract both skilled marine and hi-tech companies, which will result in higher wages for local people".

Castle Court will retain the original red brick officers' mess, which is likely be converted into apartments, and it will overlook Portland Castle and the harbour. A public consultation will be carried out before a planning application is put forward.

Work is already under way on the �21m, 600-berth Portland Marina nearby.