Revised plans to transform the former Elizabeth Shaw chocolate factory in Greenbank, Bristol, have been recommended for approval.

Squarepeg has submitted proposals to redevelop the site into 252 flats and houses, with offices, a youth hostel and a cafe.

The application was due to be heard by Bristol city councillors today.

A report to the development control committee sets out a series of changes from the original plan.

The council had previously asked the developers to give £721,134 towards education and £58,212 for libraries under a planning agreement .

But these contributions are not included in the latest plan.

The developers were also asked to make a contribution of £514,943 to public open space but have instead offered £40,000.

Squarepeg has also suggested £50,000 towards highways improvements, rather than £210,000 .

To offset this, Squarepeg has said it will spend £1.5m on making the scheme more environmentally friendly. This would include a biomass boiler which burns woodchip to reduce C02 emissions by 26 per cent, rain water harvesting and solar thermal panels.

It would also spend £500,000 on space for the community in one of the buildings. The developer has also increased the proportion of affordable homes from six to 10 per cent.

Councillors refused the scheme at last month's planning meeting because of the lack of affordable housing. Now officials say this package is acceptable and are recommending it gets the go-ahead.

A report to councillors states: "The current offer is close to the tipping point of viability.

"It has been recognised the identified monies to education, libraries and the full amount to recreation/open space are not offered.

"In making a balanced judgement on this, in this instance the increased offer to affordable housing is judged to outweigh the financial contributions to these other matters."

The council estimates the increase in affordable housing – from 14 homes to 25 – represents £720,000.

The planning officials' recommendation to approve comes with a set of 66 conditions, including the development starting within a year.

The developer says the scheme is good news for Bristol and would create 600 jobs. A spokesman for Squarepeg said: "A viability study was undertaken by the council and Squarepeg which formed the basis for this agreement.

"As well agreeing to 25 units for social housing and a package of further measures within the section 106 agreement, we have also agreed sustainability measures way in excess of the current requirement adding a further £1.5m to the development cost on top of which is a further £500,000 for the community space.

"All of this has to be viewed against the current challenging economic climate and the phrase 'blood and stone' springs to mind.

"We can live with the measures the council has pushed for".

Opponents to the scheme had raised concerns about the potential loss of a section of the Bristol-to-Bath cycle path that is included in the plans, and a 781-signature petition has been submitted.

Last month the results of a council consultation showed the majority of respondents wanted the land to be protected.

Bristol Cycling Campaign member Chris Hutt, 58, of Clifton, said: "We're disappointed that the planning committee doesn't appear to be taking any account of the outcome of the public consultation that was carried out at considerable public expense. I can't say that I'm surprised though, given the track record of the whole business.

"The issue of the land sale will remain to be determined and that must surely take account of the outcome of the public consultation, but if planning permission has already been granted, it's hard to see how they can make an objective decision."