Oxford United owner and hotel magnate Firoz Kassam has been given the go-ahead for a new hotel near the Oxford United stadium and Ozone leisure park.

The site where Firoz Kassam plans to build an 87-bed hotel

Councillors approved a planning application from Mr Kassam's company, Firoka, for a three-storey, 87-bedroom hotel, at the south-east area committee meeting.

The two-block building, including a dining room, bar, and parking for 87 cars, will be on derelict land off Grenoble Road, formerly occupied by Minchery Farm buildings.

Between the £30m Ozone complex and the 15th-century Priory pub, the hotel will be less than a mile away from the 167-bedroom Holiday Inn which was opened by Mr Kassam in 2002.

Councillors were enthusiastic about the development, but asked Firoka to address a number of concerns, including access for emergency vehicles, the scale of design, archeological investigations, and landscaping.

They also requested that repairs be made to the Grade II-listed Priory, owned and leased out by Mr Kassam's company.

Gill Sanders, city councillor for Littlemore, said: "I think a hotel on this site would be a great idea."

Fellow councillor John Tanner added: "This is a great asset, another bit of investment."

Mr Kassam has said previously that the hotel would be targeted at the "budget end of the market" and cater for tourists. He said: "There is a need for more hotels in Oxford, and this will complement Ozone and the Kassam Stadium."

The hotel will take up the last pocket of his 10-acre Grenoble Road site. The council has been criticised for selling the land to Firoka, in October 2001, for £1.5m. Mr Kassam said there was currently no timetable for the construction of the hotel as the company had not been sure the plans would get approval.

He added: "We spent a lot of money buying that site, and in doing so we not only bought the site, but a lot of problems with the city council as well.

"We have been struggling to get this for three years, but now it has gone through we will start planning for the future."