OXFORD City Council would make £5m if hundreds of student homes are built on the Territorial Army's Slade Park Barracks in Headington, papers obtained by The Oxford Times show.

Confidential documents have revealed the freehold value of the site is estimated between £6.5 and £10m and "ripe for development" - with it probably being sold at £7.75m.

The Mascall Avenue site is owned by the city council, but the Ministry of Defence still has a 20-year lease to run.

The papers also reveal Town Hall planning officers are recommending the proceeds from any sale of the 4.5 acre site are split 72 per cent to the city council and 28 per cent to the TA.

The MoD - through its property arm, Defence Estates - has applied to knock down the barracks, home to the TA since the 1950s, to make way for a complex of student flats consisting of 276 rooms - and 32 flats and 21 houses for other residents.

Part of the report, prepared on behalf of the city council by valuer Neil Evans, reads: "The site is ripe for residential development and in order the city council is able to realise its development potential, it has negotiated an early surrender of the lease - the surrender projected to take effect from October, 2007.

"Although situated in a primarily residential area, the site's proximity to the Eastern Bypass and the Oxford Business Park would make it potentially attractive to commercial use."

The city has been urged to cash in on the site because at present it receives "virtually no income at all" and would not realise the site's development potential for another 20 years.

The MoD's cut from any potential sale would go towards building a new TA centre, possibly at Dalton Barracks, near Abingdon.

The city council's decision-making executive committee considered the marketing of the Mascall Avenue site in private session on Monday.

In his report, Town Hall finance officer John Kulasek reckons final approval for the sale of the site could be agreed by September next year.

He said: "With a minimum 18-month construction programme to build the replacement accommodation at Dalton Barracks, members will note if the sale progresses according to the current provisional timetable, the council's share of receipts are likely to be generated in the financial years 2008 and 2009."

The city council has been asked to provide financial support towards relocating precious military archives and historical artefacts currently based at the Slade Museum. It is likely the material will eventually be moved to the county museum in Woodstock.