Plans for Swale council to set up its own housing company - its second biggest investment in 50 years - have been given the green light.

Cabinet members met last night and agreed to borrow between £20m and £23m to launch Swale Rainbow Homes Ltd in a bid to boost the number of affordable homes in the borough which covers Sittingbourne , Sheppey and Faversham .

All seven councillors voted in favour of the proposals which came with eight recommendations and described as a future "pillar" of the council for the next five decades.

The project will become the second biggest investment in the authority's history since it formed in the 1970s behind the Spirit of Sittingbourne regeneration scheme.

Initially, three sites already owned by the council in Sittingbourne town centre will provide 139 new flats. They are at the former East Street bus depot, the Cockleshell Walk car park near the train station and one in Fountain Street.

The latter two sites were set to be developed as part of the town centre regeneration project but the council ended that partnership in January.

Council leader Roger Truelove (Lab, Homewood), who is cabinet member for finance, said: "Once the company is set up and repaying over 50 years it will become a pillar of Swale Council.

"We would not choose to embark on this unless we thought it would be financially sound and viable. It will not be a burden on our budget and council tax payers.

"This is an investment which is financially sound. We will have our own funds to extend this to other parts of the borough which desperately need them."

Green Party councillor Tim Valentine (Boughton and Courtenay), cabinet member for environment, praised the plans and the effect it will have on the town centre.

He said: "I welcome this initiative. It's a wonderful step forward and exciting development from the council in providing affordable housing.

"It will help provide vitality to the town centre, increasing residential population near to the facilities."

Deputy cabinet member for housing Cllr Ghlin Whelan (Lab, Chalkwell) explained how much affordable homes are needed in the borough as recent homelessness figures were showing an increase.

Housing cabinet member for housing Cllr Ben J Martin (Lib Dem, Watling), who will be one of four company directors, said previously that the scheme would “open doors” for cheaper housing in the area from 2022.

Before addressing the cabinet, he said members "shouldn't be afraid to take a big step where one is needed."

He added that the likelihood of needing more affordable housing will grow because of the affects of the coronavirus pandemic and a possible no-deal Brexit. He said projects like this were "tried and tested" across the country, including Maidstone .

The plans are expected to be reviewed by Swale's scrutiny committee.

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