It was built as the grand headquarters of heavyweight insurance company Colonial Mutual Life, and was named accordingly with a pricetag to match.

But since its construction in the early 1990s, at the cost of £35m, Colonial House in Quayside, Chatham Maritime, has become something of a white elephant – a crumbling edifice to a lost past of financial optimism.

To be precise, it’s not exactly crumbling just yet, but it soon will be if developers get permission to flatten it.

The building, known as the Big Blue, has been the subject of numerous schemes since Mutual Life moved out after the company was taken over in the late 1990s – but none has come to fruition, and now plans are on the table to demolish it in order to build 270 apartments and houses.

A planning statement from applicants Chatham Quayside Ltd and Medway Basin Two Ltd said options had previously been considered for converting the existing building.

But after damning the building with faint praise, the statement goes on to say the area would be better off if it wasn’t there.

“Architecturally, Colonial House is a building of contrasts,” it reads. “The extensive use of red brickwork on the external facades, with bespoke brickwork detailing, is impressive.

“However, the sheer mass of the building and its visual dominance, lack of symmetry on its external elevations particularly as seen from the north of Basin 2, and the multiplicity of the roof structures, give it an awkwardness that is out of character with and detracts from its surroundings.

“The loss of the building would provide an opportunity to regenerate this part of Chatham Maritime with built development that enhances the overall character and appearance not only of the application site but its surroundings and views towards the site from across Basin 2 to the north.”

Part of Chatham Naval Base from the early 19th Century, the application site was redeveloped as part of the Enterprise Zone in the early 1990s – with Colonial House intended as the headquarters of Colonial Mutual Life (Unit Assurances) Ltd.

Staff arrived in 1994, welcomed by none other than the Lord Lieutenant of Kent, but left a few years later - and the applicants say attempts to find a business to move in had found “little or no market interest,” demonstrating “there was no single occupier for a headquarters office building of this scale.”

Minutes from a meeting of the St Mary’s Island Residents’ Association in April 2013 record: “As far as we know Colonial House will not now be demolished. The owners are now talking about making it a mix of apartments and commercial units.”

But that seems dashed with the latest application – unless Medway council decides to scupper the plans, which is unlikely.

Cllr Andrew Mackness, who represents River ward and sits on the council’s planning committee, said he hadn’t formed a final view but agreed the site should be redeveloped as housing.

But he added: “Having seen what I’ve seen, there needs to be more work done. I was disappointed. I hoped the development would reflect the quality of development on St Mary’s Island.”

David Taylor, chairman of St Mary’s Island Residents Association, said supported the decision to demolish Colonial House, if that’s what it took to regenerate the area. “My understanding is it doesn’t stand up as a building because it’s a bespoke building,” he said.

“It doesn’t lend itself to compartmentalising - so if it’s going to just sit there it’s not contributing anything.

“If that means demolition, that’s what it is. It’s been vacant for so long, and the residents want to see these things being used.”

Heather Kerswell, chief executive of Chatham Maritime Trust, said the Colonial House site was important for the area, but she was optimistic the Enterprise Zone had turned a corner following the recession.

“The area is picking up again. We’ve started to see buildings being reoccupied. There’s Bose House, where they make speakers and radios; Handelsbanken, the well known Scandinavian bank which is one of the best in the world, has moved into Victory House next to Colonial House; we’re in the Observatory which is now completely full.”