A multi-million pound deal which will help create thousands of jobs for Colchester is about to be signed.

The Department of Health is expected to sign contracts in the next few weeks to sell its land in north Colchester - including the Severalls Hospital site.

And the company tipped to take over the project is well-known developer Beazer Homes Colchester.

The location forms a key part of an ambitious scheme with Colchester Council to open up the largest single development site in the borough for a variety of commercial uses, possibly including a new home for Colchester United.

A spokesman for the eastern regional office of the NHS executive declined to give full details of the sale until contracts were exchanged.

He said: "We cannot say too much at the moment because we do not want to prejudice negotiations of the sale, which is a highly sensitive and complex issue.

"I can confirm we have marketed the site, a number of people put in bids on the table and we are now talking to one company.

"It is now in the hands of lawyers and we hope to complete the multi-million pound deal and sign contracts by the end of March - potentially this could happen very quickly.

"It's a massive contract and there are lots of very important aspects to it but over the next few years, all being well, we are talking about substantial financial benefits to the NHS."

A Beazer Homes spokesman added: "I can confirm we are in negotiation with the health authority and those negotiations are continuing at the moment. But I can neither confirm nor deny a deal has currently been made.

Colchester Council is currently studying proposals for a crucial new junction to the A12 between the Boxted Road and Severalls Lane flyovers.

The aim is to link this to the second phase of the northern approaches road which will run from Turner Rise to Defoe Crescent, opening up the Department of Health land and adjoining Colchester Council-owned land at Cuckoo Farm, south of the A12.

Once a junction is in place three important sites will be available for development - the Triangle, between Nayland Road, the A12 and Boxted Road for commercial and residential use; about 150 acres at Severalls Hospital between Boxted Road, Tower Lane, Mill Road and Defoe Crescent for a range of commercial uses and about 130 acres at Cuckoo Farm for commerce plus a leisure complex which could include a home for Colchester United.

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