ROYAL Mile tenements threatened with demolition would be saved under new plans unveiled today by the developers behind the massive Caltongate project.

The flats have been earmarked for demolition to create a "breakthrough" between the towering tenements of the Canongate to a planned new public square.

But the idea has proved controversial, amid fears it would spoil the unique feel of one of the Capital's most historic parts, so the latest plans instead propose creating a new pend between the Royal Mile and the planned square.

London-based developer Mountgrange has drawn up the alternative plans in the wake of widespread objections to its original proposals.

The developer has not withdrawn its original planning application for the breakthrough, saying it will allow the council to decide which option it prefers.

The changes are expected to delay consideration of the developer's plans until early next year because the through-route is so integral to the development.

It is understood the planning application for the proposed breakthrough on the Canongate has triggered more than 300 objections to the city council.

The new plans are seen as a tactic by Mountgrange to try to head off the prospect of a public inquiry.

Mountgrange spokesman Thomas Docherty said: "The new application responds to heritage concerns by connecting the new public square to the Canongate through a series of arches, which results in retaining the residential use and facade of the upper levels of the tenements."

Mountgrange has no plans to drop proposals to demolish two listed buildings to make way for a planned five-star hotel and major conference centre.

More than 200 new homes, offices, cafes, bars and restaurants, and a new cultural quarter which would see artists' studios, galleries and workshops created along Market Street are also envisaged as part of the scheme.

Among the leading critics of the proposals have been groups such as the Cockburn Association, the Edinburgh World Heritage Trust and the Architectural Heritage Society of Scotland.

One source close to talks between the council and the developer said: "Mountgrange have been backed into a corner on this and have been left with no option but to change their plans.

"This should have happened long before now, but the previous council administration did not put enough pressure on them when it came to finalising its masterplan."

Manish Chande, chief executive of Mountgrange, said: "We have always tried to listen to local concerns and balance the economic benefits on the city's heritage. The changes will weaken the impact of the regeneration and could lead to fewer jobs for Edinburgh people.

"That is why our preferred option is still to remove the tenements but we can accept the alternative application and we are happy to let the council decide between them."

It emerged earlier this month that seven of the nine council houses in the tenement proposed for demolition have already been emptied by the city council, prompting the SNP to claim that the council was guilty of "Caltongate clearances".