PLANS to replace the former Fawley power station with 1,500 homes have sparked fears of traffic gridlock on the area’s only major road.

Campaigners say they fear the A326 will be hit by major congestion if proposals to create a new small town on the western shores of Southampton Water are given the go-ahead.

Fawley Waterside has submitted outline planning applications to New Forest District Council and the New Forest National Park Authority.

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As reported in the Daily Echo, the consortium aims to build a residential and commercial development which will provide 1,500 homes and create 2,000 jobs.

The far-reaching scheme, expected to cost between £800m and £1bn, also boasts a raft of facilities including a hotel and a primary school.

Fawley Waterside is holding talks with Hampshire County Council over the need to upgrade the A326.

Proposals include extra lanes at roundabouts to speed the flow of traffic. The possibility of converting part of the road into a dual carriageway and reopening the old Totton to Fawley railway line has also been discussed.

Fawley Waterside says it intends to build “one of the most beautiful small towns in England”.

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But its application coincides with plans for thousands of new homes on the eastern edge of the Forest.

New development could also take place at Marchwood Military Port, now being run by a commercial operator, and critics say the possibility of Dibden Bay being used for port-related activity has never gone away.

Totton and Marchwood county councillor David Harrison fears a sharp rise in traffic on the A326.

Commenting on the Fawley Waterside scheme he said: “People will be justifiably concerned about the impact of a large housing development.

“There is a real risk of unacceptable congestion, even with the proposed changes to the roundabouts.

“It does strengthen the case for the restoration of a passenger service along the Waterside railway line. It’s almost criminal that this existing infrastructure isn’t being used.”

Meanwhile the district council has described the Fawley proposal as an “exciting and innovative” scheme.