A £102million proposal to transform Bournemouth’s Winter Gardens into a 400-home residential development has moved a step closer to reality after being welcomed as “long overdue” by councillors.

The controversial town centre site, containing a theatre building until its demolition in 2006, is currently used as a car park and has been subject to several discarded development ideas in recent years.

Bournemouth Development Company, a public-private partnership between the council and Morgan Sindall Investments, has proposed building flats with parking as well as shops, restaurants and an additional multi-storey car park on the site.

The council says the extra people living and spending money in the town centre could add up to £4million to the local economy, with the car park predicted to generate up to £250,000 a year.

At the council’s October cabinet meeting on Wednesday, members approved recommendations to allow the developer to begin more detailed work on the project.

Housing portfolio holder Robert Lawton described the plans as “long overdue" and believes it will be a “credit to the town on a prime site”.

Seconding the recommendations, ward councillor for the town centre Mike Greene said: “I really welcome the potential to bring life and activity back to this part of town, which has seemed a little bit sad since the Winter Gardens were closed during the dark days of the 2003 to 2007 administration of Bournemouth council.

“The superb Citrus building at Horseshoe Common and the Madeira Road student accommodation for the arts university really gives us an idea of just how much benefit bringing residents into the centre of town can have for the whole of the town and not just the town centre.”

Council leader John Beesley said the development would help the authority meet government house-building targets.

“It is very clear that there is this determination by the government for us to deliver on those housing targets and that the government will assert every pressure it can to ensure that takes place,” he said. “In Bournemouth I am confident that we are going to achieve that.”

Cllr Beesley said he is hopeful a large proportion of the residential units would be owner occupied and purchased by first-time buyers.

He added that it is “absolutely crucial” the plans work in the long term to “make sure that we have that vibrancy and that sense of ownership" which "in many towns today is quite lacking".

There is already a developer - Inland Homes Ltd - with planning permission to develop the Winter Gardens site, who say they are not pulling out of the scheme and ‘their interest remains the same’. But the BDC application suggests using Inland Homes as a "minority partner" or offering them an alternative council site.

The Winter Gardens venue was demolished in 2006, having been closed four years earlier. It was built in 1937, originally as an indoor bowling centre, and developed into a concert hall in 1946 because of its good acoustics. Over 25,000 people signed a petition in 2001 to save it, with the Bournemouth Symphony Orchestra giving its last concert there in 2002. Earlier this year BSO conductor Krill Karabits said he had high hopes the council would provide another concert venue on the site.