STRICT rules on holiday accommodation areas in Torbay could be relaxed to allow struggling bed and breakfast owners to convert their properties back to residential use.

The recommendations by planning councillors may mean a reduction in the numbers of B&Bs and small hotels.

It is hoped the move will encourage investment in run-down properties which don't make enough money from tourism by letting them convert to residential accommodation.

The new policy is also aimed at encouraging more larger hotels and holiday apartments.

Planning councillors have backed a relaxation of rules designed to safeguard prime areas for tourism businesses.

The proposals to keep the principal holiday accommodation areas, but loosen the grip on the use of approximately 80 per cent of the properties, are going out to public consultation.

Deputy mayor Chris Lewis said it would mean the owners of struggling businesses would be able to sell properties as homes, currently not allowed, or raise finance based on residential valuations, improve their properties and still be able to let rooms to tourists.

"We want to give people more flexibility. At the moment they have to raise finance as businesses which can be difficult," he said.

But he said the proposals include increased enforcement to ensure former hotels do not turn into houses in multiple occupation in all the holiday accommodation areas.

The Bay currently has 18,400 serviced beds with 70 per cent (12,880) in the four to 10 bedroom category.

Occupancy is at an all-time low of 27.5 per cent in that category and it is being suggested that at least 3,500 beds could be cut.

Meanwhile, the number of hotels in the 51 to 100 bedroom category could be increased by at least 400 beds and the number of self catering units by 1,155 to a total of 8,375.

About half of the serviced accommodation is already outside the principal holiday areas.

The local development framework working party are recommending:

'Red' core areas in key seafront locations where all holiday accommodation should remain protected for hotel, tourism and leisure use unless proved to be unviable. In addition key hotels outside this core area such as the Imperial, Palace Hotel, will remain protected. These include Torbay Road seafront including the Grand Hotel and Livermead Cliff, Hesketh Crescent in Meadfoot, Belgrave Road below Lucius Street, Chestnut Avenue, part of Falkland Road, the top of Shedden Hill including the Palm Court, Babbacombe Downs frontage, The Esplanade in Paignton, the Redcliffe Hotel and Middlepark Hotel in Paignton.

'Amber' areas will be where larger hotels and the best medium sized ones should be retained. These include Croft Road, Daddyhole Road, south Meadfoot Sea Road in Torquay.

'Green' areas where only 50 plus bedroom hotels will be protected as holiday accommodation. These include Marine Drive and Marine Parade in Preston, Babbacombe Road, Torquay, Avenue Road South, Rowdens Road, Bampfylde Road and part of Falkland Road West, Abbey Road, Warren Road and Tor Church Road in Torquay.

The council is also being recommended to take a more flexible approach to holiday apartments to allow full time or second home occupation.

Guidance would be provided on testing the viability of businesses and standards for conversion/redevelopment to improve the appearance of areas and prevent former hotels becoming houses of multiple occupation.

It is also suggested that the council take a proactive stance against activities and uses which detract from the character of tourist areas, particularly unauthorised houses in multiple occupation.

The accommodation areas were originally introduced to try to prevent the mass development of poorly managed hostels which had blighted many other tourism resorts.

The new approach was first suggested as part of the Bay's new tourism strategy published last year and has the support of the Tourism Strategy Working Board.

The tourism industry is to be consulted on the proposals and the proposals will form part of the new local plan framework.

Working party members head the redevelopment of small hotels could result in jobs losses.

However this is likely to be outweighed by the improvement in the overall economic prospects resulting from a modernised tourism sector. It could also create opportunities for new housing development.