A GWENT businessman is planning a massive rest-oration of a historic castle he owns - a year after his original application was knocked back. Property developer Peter Morgan bought Pencoed Castle in Llanmartin, New-port, for £1.7 million in 2003.

The magnificent building, dating from the 16th century, has dungeons, towers, moat and a Great Hall.

Mr Morgan wants to restore and convert the castle for office use, and plans to construct new buildings on the site to use as offices.

He also wants to build 12 executive houses on the site to help pay for the restoration, which he estimates will cost £2 million.

But a year ago this month Mr Morgan, 43, from Usk, had an almost identical application turned down by Newport council.

Planners cited fears over the financial viability of the project, access to the site and that extra homes would be built in the future.

Mr Morgan told the Argus he had overcome council concerns by changing his business plan and moving the planned access road so it would be out of sight.

He said office use was the best option for the 25,000 sq ft castle. "We looked at various possibilities, including a hotel, but that's not viable. "The most profitable thing would be to split it into houses but I want to keep the castle as one entity. If it was housing you would have 15 people owning bits of it and it would never be one entity again."

Mark Robotham, a member of the Old Hamlet of Llanmartin Association, said residents were concerned they had not been consulted about the plans.

He said: "We know the castle needs repair and restoration and that's a positive thing.

"But if they have permission to build houses what then? Will they go on to build more houses? We are concerned this could be the thin end of the wedge."

The group are holding a public meeting about the plans next week. Mr Morgan said his plans can be viewed at Newport civic centre, and said he would address residents' concerns.

The application will be considered at a future planning meeting.