The opening chapter of the regeneration of Stevenage town centre could be about to begin after councillors gave the green light to plans to build up to 526 flats.

The outline planning application by Intercounty Properties Limited proposes developing land currently occupied by the Matalan store and adjoining Stevenage Borough Council car park into a complex including flats, shops, restaurants and parking spaces.

The borough’s planning and development committee chairman Councillor David Cullen said: “In my opinion it probably is the start of the town centre’s regeneration because the nature of the regeneration is different to what it was.

“Instead of having one big developer, applications will come on a more sequential basis.

“As soon as we start developing the area we hope it will attract other organisations.”

The application to build up to 181 one-bed and 345 two-bed flats went before the council last month but councillors sent it back to planners and asked for more information about the number of affordable units, the number of parking spaces and whether the building would be inkeeping with the area.

They had raised concerns that only 24 of the 526 units would be affordable, markedly less than the 40 per cent – 210 flats in this case – the borough council likes developers to offer.

Intercounty argued that meeting this quota would make the project financially unviable. The council had the claim examined by an independent assessor, who agreed with the firm.

The loss of parking space with only 109 spaces being provided was another bone of contention.

The developer has agreed to increase this number to 175 – the council’s minimum requirement.

The building’s 13 storey height was found to be in keeping with the area and will remain.

Despite the concessions, two councillors voted against the application, with one abstention.

Councillor Cullen added: “I wouldn’t say I’m pleased with it. I would say I’m happy with the application to go forward.

“In planning terms it was relatively straightforward. In terms of the size, this is something to be considered with the details to follow.

“When, and if, the developer submits a further planning application it will come back in for the committee to consider the details.”

If the development goes ahead the firm will have to pay the council S106 money to compensate for any additional strain it puts on public services.

A figure will be decided when a final decision is made on how many flats will be built.