A RUN-down area of Blackburn could be transformed thanks to a multi-million-pound project to build 165 canalside homes.

Plans have been unveiled for the homes on the site of a demolished factory and car park along the Leeds and Liverpool Canal near Blackburn Royal Infirmary, which closed earlier this year.

Blackburn with Darwen Borough Council has teamed up with housing firm Places For People, formerly North British Housing Association, to put the plans together for the redevelopment.

The proposals feature 165 homes, an extension to an existing community centre, the conversion of an old methodist hall for community use and the creation of public open spaces.

Residents are being invited to have their say on the plans, which have gone on show at the Ivy Street Community Centre.

Council bosses are yet to confirm the cost of the scheme, on council-owned land, but it is understood to run into tens of millions of pounds.

The scheme is intended to complement a project underway to turn the nearby former Blackburn Royal Infirmary site into homes.

Coun Mohammed Khan, the council's executive member for housing and neighbourhoods, said: "These plans are great news, bringing investment and quality housing to the Infirmary area.

"Through working closely with key partners the council is delivering change to the area and residents' views have been vital to ensure the plans reflect their needs.

"These plans will work hand in hand with the other developments across the area providing quality, affordable housing for people both in the borough and beyond."

The new, waterside site, is part of the Housing Market Renewal area, which allows the council to tap into funding to help clear derelict areas.

Blackburn with Darwen Council has struck a deal with Places For People, which will appoint a contractor to carry out the work, possibly as soon as early 2007 if planning approval is granted later this year.

A spokesman for Places For People said: "Places for People is committed to creating sustainable communities in areas where people are proud to live and work.

"Working in partnership with Blackburn with Darwen Council, the local community and the government pathfinder Elevate, we plan to build around 165 new houses and flats for sale, affordable rent and shared ownership in the Infirmary Waterside district with a new public square by the canal."