The site of Witney's last remaining blanket factory is to be redeveloped for housing.

But the blanket manufacturers, Early's of Witney, have not yet found an alternative place to move to.

The redevelopment of the Burford Road site was agreed in principle at a meeting of West Oxfordshire District Council's lowlands planning sub-committee.

Final details have yet to be worked out, but the company, in partnership with adjoining landowner All Souls College, Oxford, plans to develop 18 acres of land, including the site of the blanket factory, which stretch down to the River Windrush.

About 150 homes will be built.

Council planning officer Ian Morrow said it was agreed that Early's factory was not suitable for modern industrial production and that the firm needed a new site.

About 100 workers are employed at the factory. They have been assured that the company intends to relocate.

However, councillors had to consider the redevelopment scheme with no firm plans about an alternative site.

The business was founded in 1669 by Thomas Early. It became a leading manufacturer in a town that earned a world-famous reputation for blankets.

The present factory, built in the 1960s, is the only one left in the town. The scheme sparked protests from residents worried about the impact of redevelopment in the town, and from the neighbouring parish councils of Hailey and Crawley.

The councils fear that the housing development will create more congestion in the areas of Bridge Street, West End and Woodstock Road in the town. It has also been suggested that the scheme should be delayed until a long-awaited West End Link Road is built.

However, the district council hopes to make a planning gain from the scheme, including a proportion of socially affordable housing, and £650,000 towards the extra cost of education, transport and libraries.

Early's said its planning application should be treated as a special case, to realise as much money from the sale to facilitate factory relocation costs.

Cllr Jonathan Phillips said: "There is an awful lot of new housing in that area, and it could cause considerable congestion if we do not get the West End link road. But we must also secure affordable housing."

Management at Early's were unavailable for comment.