PLANS have been put forward to breathe new life into the site of the former King Edward VII Hospital near Midhurst . Developers Lincoln Holdings want to build a 46-bed nursing home, a leisure centre and 64 new homes on the site. The company exhibited the plans for public consultation this week, and plans to submit an application to Chichester District Council for planning permission for the scheme. A shop and 5,000 sq ft of office space are also included in the scheme, to provide business space for residents living on the site. The decision to close the hospital was only made two months ago, following the announcement by health care company Capio that it was pulling out of negotiations to build a new hospital, 200 luxury apartments and 166 houses on the site. The original plans have now been revised, and Lincoln Holdings claims the new plans represent a 50 per cent reduction on the footprint of the original buildings. Lincoln Holdings director Stephen Friel said: "There will not be as many buildings on the ground as there are now and the intensity of new homes will be less. "A nursing home and leisure centre have been included in the plans but there will be no building on the greenfield sites." More than 200 flats are also proposed in the scheme, which would see the conversion of the former hospital wing and nurses' accommodation. The developers also hope to convert the former chapel into a leisure centre. If planning permission is granted, Lincoln Holdings hopes to have all the work completed within two years. Mr Friel added: "There has been great concern about what would happen to the chapel, as it is a listed building. "The original scheme did not include the chapel because we wanted to consult English Heritage first. "They don't want to divide up the internal space, so by converting it to a leisure centre we will not only keep the building but also save the space from where the leisure centre was originally planned to go." All the new buildings will be on previously developed land, easing fears that open areas would be lost. The chairman of Midhurst Town Council, Colin Hughes, said he was relatively pleased with the new plans. He said: "The developers' proposals look very interesting and I don't think there will be any strong objections to it. "It's essential that any future building is on the footprint which is already there, and these new plans are." However Mr Hughes said he was concerned about the lack of affordable housing within the scheme. He added: "We need some affordable housing and hope that could be included. "There is a real lack of this type of housing in the area at the moment and it is becoming a bit of a problem. "There should also be some money going to the town to help provide the infrastructure for this new development." Despite worries over access to the site, Mr Hughes said he was confident that a solution would be found to suit everyone involved. The hospital, which had been treating NHS patients for more than 50 years, was forced to closed in March. Negotiations with American company Capio broke down, leaving the hospital with no choice but to close its doors. More than 200 full- and part- time workers lost their jobs with the closure, and the Macmillan Cancer Care Unit was also forced to shut down. The Western Sussex Primary Care Trust then vowed to help Macmillan by offering care services for cancer sufferers over a 25- mile radius.