A council-owned company behind a 10,000-home garden town is asking the authority to increase borrowing by £80 million – almost doubling the loans to complete the project.

Contracts worth more than £10m have also been released this week allowing work to begin on the first phase of infrastructure requirements for Otterpool Park, near Hythe.

Otterpool Park LLP – which is partly owned by Folkestone and Hythe District Council (FHDC) – has called on the authority to up its loan facility for the site surrounding the former Folkestone Racecourse.

Earlier this month, the masterplan for the project which will also include new industrial space, schools and retail areas as well as parkland within the develoment, was approved by FHDC’s planning committee.

Now, council papers reveal the request from Otterpool Park LLP to cover the development company’s “peak debt requirements” just a few weeks after planning permission was granted.

The LLP has asked for the council to approve increasing the maximum amount to borrow in a report to FHDC cabinet members updating them on the project’s progress and the latest business case.

This would increase the loans taken out by 67% to £199m – from the currently agreed level of £119m.

The additional cash would be used for “accelerated land acquisitions” with £49m allocated and another £31m to cover “inflationary cost pressures on infrastructure provision”.

The report states: “The increased funding level sought by the LLP will address the project’s peak debt period, securing land options as early as possible and facilitate timely delivery of necessary key phase one infrastructure for utilities and the upgrade of Westenhanger Station to accommodate HS1.”

It added an agreement with Homes England – the government’s housing agency – meant there might not be as much funding coming through directly from the body as initially expected.

The report said: “The basis of the proposed collaboration is that Homes England would acquire optioned land included in the Otterpool Park project area and make a contribution to the costs of the early infrastructure required.”

It added “ongoing discussions” had revealed the “form and level of investment initially proposed” by Homes England is “unlikely to be progressed as Otterpool Park is a viable, long-term profitable scheme”.

This has led chiefs at Otterpool Park LLP to make the request for “a significant increase in the borrowing facility” from the council.

The updated business plan setting out the request was presented to cabinet members last Thursday.

Councillors agreed for the proposal to go before FHDC’s scrutiny committee before coming back to cabinet for a final decision on whether to approve extending the loan facility.

Meanwhile, infrastructure works approved under the release of the contracts include a £1.2m railway station upgrade for Westenhanger and a further £8.5m contract for utilities.

FHDC has released the funds to formally appoint contractors to carry out the works.

The utilities contract will see electric, water and all telecommunications fitted to the development and will be done by Networx Utilities.

Network Rail and South East Trains Limited will conduct the works to upgrade Westenhanger railway station so that it can handle high speed services.

Another £340,000 has been agreed for the masterplan and design code to be developed.

A council report says the contracts needed to be awarded in April “as they are considered essential to ensuring that the deliverability of the overall project programme is not delayed”.

It added the three deals “are for works that form an integral part of the overall delivery” of the project.

A spokesman for Otterpool Park LLP said: “We are very pleased with the decision which enables us to move forward.”