PLANS to convert a former nursing home into luxury flats have been blocked by councillors.

Members of Teesdale District Council's development control committee feared the residential development at St Peter's House, next to the A67, at Gainford, between Darlington and Barnard Castle, would mean it could no longer be used to generate jobs for the area.

The red brick Victorian building was a residential school before it became Greenacres Nursing Home, catering for 35 elderly residents.

The private home was forced to close in 1999 because of financial problems, and the building has remained unused since.

The proposed development will transform a small part of the former nursing home into five one, two and five-bedroom apartments.

But despite the majority of councillors voting against the plans, some members were concerned that the building would be left to decay if it was not developed soon.

Councillor Newton Wood said: "I think we need to look at the needs of the area. I think it would be better used as flats for young local people."

His views were echoed by Councillor Margaret Hamilton, who said the flats development would help to smarten the appearance of the building.

But the majority of committee members felt that it would be better used as a commercial property.

Gainford ward councillor Ken Hodgson said the village needed extra jobs for local people.

He said: "Gainford has lost seven small businesses and 140 jobs in recent years, and we need to work to get these back.

"This is not the right site for a residential development. It must and should be used for industry. We need to advertise it to give businesses a chance before we can think about it becoming a housing development."