Campaigners have claimed that a development of around 300 properties will ruin the character of one of Scotland's most important tourist destinations - Melrose Abbey, the resting place of Robert the Bruce's heart.

Rivertree Developments are pushing through proposals to build 300 additional homes on a 60-acre site at the disused Dingleton psychiatric hostpital in Melrose, which could add as much as 50 percent to the 2000-strong population of the small town. The lunatic asylum was originally built in 1872 but was sold to the developers after the Borders Health Board closed the hospital last year. The houses would be aimed at commuters working in Edinburgh, many of whom are unable to afford the skyrocketing prices in the capital.

But community leaders are none too chuffed with the size of development, which they claim could cause too much noise and traffic. This is despite the fact that the town already gets tens of thousands of visitors each year, and the fact that Rivertree is willing to pay out more than £80,000 to help Melrose's primary school and improve roads and parking facilities.

George Bunyan, chair of Melrose Community Council, said: "Melrose is a gem and our council cannot support this project although we accept Dingleton has been earmarked as a redevelopment site. To build 300 houses on the edge of town is simply unacceptable and we have to hope restrictions and controls will be imposed at the detailed planning stage."

The developer has thus far given no clear indication of the size or type of house that will be built, something which would probably help appease local concerns. Outline planning permission is likely to be granted early next week, after which Rivertree will draw up more detailed proposals.

Charles Johnston, the senior planning officer who has played a key role in gaining approval in principle for the development has not done so without some reservations. He said: "It is unfortunate that a more imaginative development with the potential to provide clearer benefits for the wider Borders economy is not being achieved. This may be seen by some as a missed opportunity."