The 90-acre Fair Mile Hospital, at Cholsey, near Wallingford, has been named as a site for a major new housing development.

The former Victorian mental hospital complex, which has a number of listed buildings, closed three years ago and has been empty since.

Chancellor Gordon Brown and Deputy Prime Minister John Prescott see it as a major factor in the Government reaching its housing targets.

The move has not surprised Cholsey parish council chairman Alan Dawe.

He said: "A year ago, Mr Prescott took over former NHS sites so they could be built on quickly, and we have been waiting for this announcement ever since.

"The Fair Mile Hospital site was subject of a South Oxfordshire District Council development brief which envisaged about 150 new homes. I suspect that in the Government's mind, the hospital site also includes Celsea Place across the road from the hospital which is NHS land and could be used for a lot of homes."

So far, no announcement has been made on how many houses will be suggested for the Cholsey site.

The planning and building for the Fair Mile site will be done by English Partnerships which will oversee the building of up to 15,000 new homes on 100 ex-NHS sites.