A £1.2M investment plan has been revealed by developers poised to build 350 houses on land bordering a village and Durham Tees Valley Airport.

The one million-pound package has been outlined to expand a primary school, improve roads and footpaths and upgrade sports facilities for residents in Middleton St George, near Darlington.

Planning permission to build the major housing development was granted by Darlington Borough Council in March, despite 422 formal objections being submitted to the authority over the plans.

The scheme, which incorporates houses, retail and office space, a cafe, restaurant, pub, gym, and a car showroom, attracted criticism from residents and was described as “the final nail in the coffin” for the airport by ward councillor Doris Jones.

However, the airport’s majority shareholder, Peel Group, has announced an allocation of £1.2m for Middleton St George with Durham Tees Valley bosses expecting revenue generated from the housing development to be re-invested into the “wider airport business”.

The financial package has been split four ways with St George’s Church Primary School receiving £450,000 to allow for its expansion and £250,000 going towards improvements on the A66.

Around £413,500 has been earmarked for new street lighting, bus stops, footpaths and cycle routes, and £38,400 has been set aside to upgrade sports pitches.

A Durham Tees Valley Airport spokesman said: “Central to our plans is maximising the potential of the whole airport site to provide other sources of revenue alongside our passenger and general aviation operations.

“Durham Tees Valley has the advantage of having a significant land holding, with the opportunity to deliver developments, such as the housing plans within the application.

“The funding to be released from the housing plans will, of course, become available once a developer becomes involved.

“Similar housing schemes have been successfully developed at a number of other UK airports and the planned housing will be on land which will not affect airport operations nor hinder future growth.”

Residents expressed their concerns over the plans to develop the 61-acre plot that includes the airport’s existing car park, the St George Hotel complex, a temporary caravan storage park, and playing fields to the south of the existing housing at Oak Tree in Middleton St George.

During the council meeting held in March to approve or block the development, planning committee members heard the airport was operating at a loss of £200,000 per month.

Peel Group representatives added that the company has a contract to keep the facility open until 2021 when its financial viability will be reassessed.