Adam Smith home left to market forces

Adam Smith, the celebrated philosopher and economist, lived with his mother in the house in a close off Edinburgh's Royal Mile for 12 years before his death in 1790.

But it is largely unknown that the Canongate building is where the "father of capitalism" held court in later life – as it is hidden away off the tourist trail and in recent years has been used as a centre for troubled youngsters.

However, campaigners, who have fought for greater recognition of Kirkcaldy-born Smith, have been left dismayed after discovering that the city council has put the building on to the open market.

The council has been repeatedly urged to instigate plans to convert the property, built for the Earl of Panmure in 1691, into an "Adam Smith Museum" or study centre in his honour.

But the council has instead put the building, previously converted into a home for Canongate Boys' Club, up for sale with a 700,000 price-tag and will plough the proceeds into refurbishing a community centre.

Agents handling the sale say they are expecting significant demand for the building, which they believe could be converted to become offices or flats . But the prospect has horrified experts months before Smith's long-awaited statue is due to be unveiled on the Royal Mile.

The veteran campaigner Professor Sir Alan Peacock said: "It's a disgrace that the council has agreed to dispose of a building as significant as this. It should be saved for the nation."

Dr Eamonn Butler, the director of the Adam Smith Institute, said: "We've thought about approaching the council about Panmure House in the past to see what we could do. I doubt we'd be able to bid for it."

However, a spokeswoman for the council, which used to run a social work centre in the building, said: "Many of Edinburgh's buildings have significant historical importance. So when considering the future of a building, we look at whether it's in its best interests to remain in public ownership or be sold."