The decision, made by the borough council’s planning committee, effectively safeguards the future of an historically important old workhouse building, which will be converted into eight of the properties.
And councillors also stipulated that at least one of the historic former vagrant cells - which campaigners have fought passionately to save - should be retained on the site due to their importance to the town’s heritage.
Applicants, Homes England, have also agreed to pay nearly £600,000 in infrastructure costs to mainly support local education after a decision on the scheme was deferred back in May when Leicestershire County Council threatened the borough council with legal action if it permitted the original plans which allowed for just £67,000 to be paid to County Hall.
Developers will not be required to provide any low cost housing on the site but the applicants say there is potential for up to 40 per cent of the properties to be priced in the affordable range.
As councilors debated the proposals, deputy leader Leigh Higgins implored them to back the scheme to safeguard the historic buildings for future generations and to make good use of a key site which had been derelict for a decade.
He told colleagues: “It is now as though 90 minutes is up, we have a penalty in the last few minutes of injury time.
“Are we going to stick that ball in the back of the net and finally save the St Mary’s workhouse building that we all know and love?
“Many people have had children in there and many have been born in there.
“It’s an icon for Melton.”
The approved plans to convert the central block and wings of the former workhouse into four houses and four apartments was a full planning application.
But outline permission - with full details to be supplied in a full application later this year - was also backed by the committee to demolish other existing buildings and structures on the site and build 38 further properties.
But members attached a condition that at least one of the former vagrant cells on this portion of the site should be retained as a tourist feature for future generations to enjoy.
This was agreed following a suggestion by Councillor Ronan Browne, who told the meeting: “This site is an iconic part of Melton Mowbray and I don’t want to be named as one of the councillors responsible for the town losing more of its heritage.”
Three different petitions, signed by more than 2,000 people, had been lodged with the council, calling on the authorities to prevent demolition of the vagrant cells, which date back to 1895 to a time when being homeless on the streets was considered a crime.
The applicants have argued that it was not financially viable to retain the cells, due to the space they take up on the site, or to rebuild them elsewhere as a heritage feature.
But one of the most prominent campaigners, Glynn Cartwright, suggested a compromise solution when he addressed the meeting: “The developer should be allowed to carefully demolish the vagrant cells, then rebuild two cells complete with the original front door at another accessible location at the front of the site.
“A seating area could be created adjacent to the preserved cells and a boundary wall with depiction board detailing the site’s history should be built using the original brick.
“The internal parts of the cells should be visible via glass or perspex panels.”
He added: “Do not let another piece of our heritage succumb to the bulldozers and be lost without trace.”
Mark Jackson, agent for the applicants, told councillors that there would be ‘a substantial cost’ attached to rebuilding and maintaining the vagrant cells and suggested that community fundraising might be the only option for making it happen.
The application does not provide for low cost housing because the site qualifies for ‘vacant building credit’ due to the length of time the buildings have been vacant.
But Mr Jackson told the meeting: “Homes England have secured a preferred developer for this site who does intend to provide up to 40 per cent affordable housing provision on the site through Homes England grant funding.”
Jim Worley, the council’s assistant director for planning, said the development would help solve flooding problems in that part of town because a new drainage system would be installed.
Nine of the 11 councillors approved the application with Councillor Elaine Holmes, who voted against it, suggesting that there was not enough open space on the site and that more should be provided with the need to socially distance during the ongoing coronavirus pandemic.
She also suggested there would be traffic congestions and dangers created by the extra vehicles using the access via Thorpe Road, although the county highways department did not object to the scheme.