Children in hard hats at St Michael’s Estate, which is set to be redeveloped. Inset, the proposed St Patrick’s stadium ‘was never a runner’ Photo: Sasko Lazarov/Photocall Ireland

Ambitious plans for a state-of-the-art football stadium have been ditched - as up to 500 new homes look set to get the green light instead.

League of Ireland club St Patrick's Athletic had drawn up a major development plan for the St Michael's Estate in Inchicore to transform one of the most neglected parts of the city.

The club proposed a 12,000-seater stadium on the St Michael's site, which would have included a shopping centre and other amenities.

The stadium development was to be financially independent and not be reliant on receiving any Government grants. It was to be designed by leading architect David Mizrahi of HRS International.

Mr Mizrahi has been responsible for stadiums across Europe and was also the lead architect with Santiago Calatrava on the Samuel Beckett and James Joyce bridges in Dublin.

However, in a blow to the Saints, the Irish Independent can reveal that this has not been given the go ahead.

Housing sources say that the St Pat's proposal "was never a runner".

It is now expected that some 500 homes will be built on the site, with an announcement early next week. The homes are set to be a mix between social and a new cost-rental model and are to be controlled by Dublin City Council.

The cost-rental model will ensure that rent paid by tenants will be below the market value, not for profit.

It ensures that the 12-acre site along with the homes will remain in public ownership, with the council acquiring a loan to pay back construction costs, meaning it will pay for itself over time.

Yesterday it emerged that the European Investment Bank (EIB) Ireland financing group had reached an agreement to fund a pilot scheme for affordable housing in Ireland.

In a statement they said "that a pilot initiative to increase the availability of affordable housing would be launched in the near future".

Up to 70pc of the homes will be under the cost-rental scheme, meaning the council will be able to borrow that percentage of construction funds. Among the amenities expected will be a library, a community centre and a retail unit.

Under the cost-rental model tenants will be required to pay rent based on the running costs of the complex along with the cost of paying back the construction loan.

The exact cost of rent may vary depending on the income of the tenant or size of the unit.

Chair of the Dublin City Council Housing SPC, DaithÍ Doolan, told the Irish Independent this model was always the preferred option. He said the council need to move quickly on this development.

"It is essential that St Michael site is properly developed.

"It must include the building of social and affordable housing as well as essential economic regeneration of Inchicore," Mr Doolan said.

Irish Independent