St Margaret's School, which was forced to shut its doors in June after being unable to pay its 2.5 million worth of creditors, could be converted into a nursing home and 60-bed care unit if planners give the project a green light.
Around 350 pupils had to be relocated to schools across the city following its closure 120 years after it was founded in Newington.
Four Seasons Health Care - partnered with S1 Developments - are behind a joint application to construct a nursing facility which could generate around 20 jobs in the care sector. Administrators KPMG, which is overseeing the sale of the St Margaret's assets, put the school buildings on the market last August and plans to use the proceeds to meet unpaid debts.
The News previously reported how a consortium of Muslim businessmen were considering a 800,000 transformation of the site into a national 'Islamic Academy and Mosque' which now appears to have been superseded by this fresh bid. A blueprint for 4500 square-metre site shows an en-suite bathroom attached to every bedroom in the care unit. The facility would be run by 12 nursing staff, three kitchen staff, a manager, deputy manager and three cleaners.
In a joint statement, partners Four Seasons Health Care and S1 Developments, said: "The main school campus of the former St Margaret's School in East Suffolk Road is being purchased by S1 Developments, an Edinburgh-based property development company. In collaboration with Four Seasons Health Care they confirm a planning application has been submitted to establish a residential and nursing care home at the site.
"The company believes the planned home would help to meet a local need and would be a fitting use for the site. It would be inappropriate to comment further ahead of the planning decision."
Local councillor Gordon MacKenzie said developers had to ensure Newington residents were not plagued by increased noise and traffic. "The concern locally is how intensely the various sites with the school will be used," he said.
"A care home in itself gives no great cause for concern but this is part of a break up and re-use of St Margaret's and we will have to see how the whole thing fits together. Whatever happens to the site there must be respect for the local community who do not wish to see unacceptable traffic levels or increased noise."
A background summary attached to the care home application says the building "will not be brought back into use as a school" and if it continues to remain unused "its condition will deteriorate quickly, bringing security and health and safety issues upon local residents".
A southern portion of the site is subject to a live planning bid to form a pre-school nursery and three flats,