Councillors in Dartmouth are angry at the lifting of a covenant meant to save part of a former hospital for social use, claiming they have been kept in the dark about the details of a potential deal with a commercial developer.

Bids for the Dartmouth and Kingswear hospital, which closed in 2017, have to be in by January 17, after the site went up for sale in October.

The hospital was requisitioned by the government in 1948, and at the time it was understood that the building would be returned to the original Trust or its successors, in this case the town council, if there was no longer a use for it.

Part of the deal included a covenant dating from 1925 which stated that 16 per cent of the hospital building would be designated for social use.

However, South Hams District Council (SHDC) lifted the covenant in February this year, much to the disgust of many Dartmouth councillors, who claim they were unaware this had been done.

Speaking at last week’s Dartmouth town council meeting, Cllr Kim Sturgess said: “(The covenant) has been given away by South Hams District Council for nothing. I’m very annoyed...that I found out this afternoon (December 11).”

Ruling councillors however argue that Dartmouth council was not in a position to challenge SHDC’s decision to lift the covenant.

Mayor David Wells told this paper that SHDC had released the covenant legally but questioned the ethics of doing so. “We could have been told that part of the process of the selling of the building was that the covenant was taken off,” he said.

Much of the anger also stems from fears that the site will be used to build luxury homes, which goes against much of the community’s reported wishes to build affordable housing.

As reported in this paper in October, the hospital site was put up for sale to help fund the town’s new £5.4 million health and wellbeing centre, built about two miles from the old hospital site.

It is understood that the local authority would receive a significant initial sum and receive annual ground rent from the developer in exchange for building on the site.

Cllr Ged Yardy last week revealed that the main bidder in the running is developer Dartmouth Riverside Ltd, a London-based company that was created in April this year.

However, according to the council, the developer is also short of cash. Speaking at the council meeting, Cllr Yardy claimed the developer had “failed consistently to provide funds”, adding that they needed to find further investors.

After the meeting, councillor Dawn Shepherd demanded more information on the deal. Speaking to this paper, she said: “When did the NHS buy our hospital and how much did they pay for it? It’s like loaning your car to someone and they use it for a month and all of the sudden it’s not yours anymore. It’s ridiculous.

“Whoever is thinking of buying this knows they will have a fight on their hands. We won’t go lightly on this,” she added, pledging to take more direct action.

“The community will do what it did when they closed down the hospital, even if I’ve got to chain myself to it like I did last time when it closed. We had protests, we had marches, whoever buys this site will not get an easy ride. ”

Some 200 local people fought against the hospital’s closure in 2017, and at the centre of the campaign was Mike Mills, chairman of Dartmouth area health care action group when the hospital closed.

He said: “Many of us here in Dartmouth feel very strongly about this because what we expect will happen is that the land, which is a prime site, will be developed into more expensive apartments, and the developer will walk away with a tidy sum.

“A major concern is that the apartments will not be affordable for local people, and we don’t need more expensive apartments here.”

This paper has contacted one of the director’s of Dartmouth Riverside Ltd for comment.