Around 500 new homes could be built on land at Plymouth City Airport as part of an ambitious investment plan.

And money from the sale of the homes would be re-invested back into the airport, which could pave the way for future extensions to the terminal and runway.

Terry Linge, director of Plymouth City Airport, said: "This represents a major investment in Plymouth City Airport and will ensure that it continues to play a vital role in supporting the regional and city economy.

"Since we took over the airport in 2004 it has expanded from just a handful of routes to the 10 that we have today, including new flights to Newcastle, Glasgow, Cork and Dublin that were launched in April."

Plymouth City Airport Limited, which operates the airport on a 150-year lease from Plymouth City Council, will detail its multi-million pound plans at a two-day public consultation next week.

This will be followed by a planning application to Plymouth City Council at the end of June, paving the way for a decision in the autumn.

The plan comes after an agreement in March between Plymouth City Airport and the city council to close the airport's little used secondary runway.

The surplus land will be used to build a mixed-use development, the proceeds from which will help to fund major airport enhancements, including the relocation of essential airport facilities and the development of air services.

Terry Linge, Plymouth City Airport: "This represents a major investment in Plymouth City Airport and will ensure that it continues to play a vital role in supporting the regional and city economy."

Mr Linge said: "None of the land in question is required for airport operations either now or in the future, and the plan will ensure that we can continue to grow Plymouth's network of air services for many years to come.

"Our plans provide for future growth at Plymouth, including possible extensions to the terminal and runway, but this will depend on growing passenger numbers so we're sensibly taking a step by step approach."

The plans centre on the South West corner of the airfield bordered by Tavistock Road and Plymbridge Lane and currently used for part of the secondary runway, engine testing and hanger facilities.

Also earmarked for development is a small area of operational land bordering Plymbridge Road, currently occupied by navigation and landing lights that will become redundant with the closure of the secondary runway.

The planning application will include a full environmental study that will look at a range of factors including traffic, public transport, landscape, ecology, drainage, public services and sustainability.

Mr Linge explained that there were no plans at this stage to extend Plymouth City Airport's runway, which could cost tens of millions of pounds due to the need for massive infill to the east of the airport, but that did not mean it couldn't happen in the future, depending on demand.

He said a 2006 study into the airport's future by consultants York Aviation had suggested a potential market of 520,000 passengers per year by 2020 without any extension to the runway, which was broadly in line with the City Council's Core Strategy objective to achieve 590,000 passengers by 2021.

The York Aviation report also estimated that the airport could be worth more than £90m a year to the local economy by 2030, even without a runway extension.

Local people will be able to have their say on the airport proposals during a two-day exhibition on Thursday June 12 from 2pm until 8pm and Friday June 13 between 12.30pm and 6pm at the George Junction Park & Ride terminal off the A386 Tavistock Road, which will be permanently staffed.

Once the responses to the consultation have been received and analysed, the company will submit a planning application for the airport enhancement works and the new access road, together with an application for the residential and commercial aspects of the scheme. This will be at the end of June. If approved, work could start next year.

The plans, which would be developed in phases, include:
- The relocation of the engine testing facility
- A relocated fuel facility
- The construction of up to three new hangars
- New aprons, taxiways and aircraft stands
- The essential relocation of firefighting and rescue services
- Surface car parking for 240 cars
- A new access road between Tavistock Road and Plymbridge Lane
- Up to 3,000 sq metres of employment space
- Up to 495 homes
- Car parking, landscaping and infrastructure works