A major city centre regeneration scheme which will see more than a 1,000 homes built on a derelict industrial canal-side site has passed its first planning hurdle.

Outline planning permission has been granted for the transformation of the Icknield Port Loop site near Edgbaston Reservoir - complete with homes, a park, a ten storey hotel, superstore and other facilities.

The 22.5-hectare site is owned by The Canals and Rivers Trust (formerly British Waterways), the Homes and Communities Agency (HCA) and Birmingham City Council.

The site, previously owned by Advantage West Midlands, has been earmarked for development for many years but previous schemes stalled as a result of the recession.

Assistant director of development Waheed Nazir hailed the decision as a major step forward for Birmingham.

He said: "This will increase the offer of quality city living accommodation in Birmingham. This is an important site for the city centre."

Although winning the unanimous backing of the council's planning committee there remain some reservations over the density and design of housing which will be picked up at the detailed planning stage.

There was also support for several changes to plans seen earlier this year, including the addition of canalside paths to prevent the 'canyonisation' effect of tall apartment blocks lining the water's edge.

Coun Barry Henley (Lab, Brandwood) said: "We all welcome this scheme. It will provide 1,115 houses which are definitely needed.

"There are a number of significant changes to the plans we saw before, some are good and some are bad."

He welcomed the inclusion of towpaths on at least one side of the canal. "It means that people can stroll along one side, and that some apartments may still have balconies with space to moor a yacht alongside. I am told these things exist."

But he was critical of the density of housing, wondering if 120 dwellings per hectare in some parts of the estate will be popular enough for people to want to live in them.

And he was unhappy with a road cutting through the public park at the centre of the estate and asked developers to reconsider.

The design of some homes, as modern back-to-backs or shared courtyard homes, was also a concern he said.

"I am not convinced that people want courtyard living, particularly if you share the space with a noisy family. Wherever they are in the world these things quickly become slums."

The committee had hoped to visit a similarly dense housing project in the Greater Manchester area to see how it works, but had been unable to arrange a date before the planning application deadline.

A 1930s art deco factory will be demolished as it is regarded as beyond repair.

The site in Edgbaston includes various industrial premises, the majority of which are vacant and the site of the Ladywood Arts and Leisure Centre Icknield Port Loop, part of the canal network in Birmingham

According to an earlier presentation to the committee by Peter Weatherhead of planning agents DTZ, the aspiration is that family homes will be designed in three waves and densities, with two and three-storey family homes on the arts centre area rising to an eight-storey apartment block at the centre of the development.

The Icknield Island and Wiggin Street area will see "innovative" medium density terraced housing, including the possible return of back-to-back housing to Birmingham.

The former Tube Works, on the corner of Rotten Park Street and Icknield Port Road, will be retained and redeveloped and a former stables block on Rotten Park Street will be turned into a community building.

Mr Weatherhead said: "This proposal will create a sustainable urban neighbourhood and place where families will want to live.

"The community wants something to happen and should we receive planning permission the developer will be able to deliver that vision."