Permission to turn Carnagarve House, a protected structure overlooking Lough Foyle in Co Donegal, into a boutique hotel has been granted by An Bord Pleanála. But an adjoining application for an additional nine homes has been refused.

Red Sails Development and Regatta Developments were looking for permission to develop Carnagarve estate, which is less than a mile north-east of Moville on the eastern side of the Inishowen Peninsula.

The site has extensive views over Lough Foyle.

An Bord Pleanála has granted permission for the change of use of Carnagarve House, from residential use to a six-bedroom hotel with spa and meeting facilities.

This decision was taken despite a recommendation from the board's inspector to refuse permission.

Permission for six cottages was also granted, but the planning board ruled that the six holiday cottages cannot be used as private holiday homes or dwellings, and can only be used as self-catering accommodation by the hotel.

Meanwhile, the board has refused permission for two adjoining planning applications for nine four-bedroom houses.

This is the fourth time that planning permission has been sought on the site. Most recently a similar scheme to convert the house into a hotel and build six dormer houses was refused because of the risk of water pollution and negative impact on a protected structure.

This time out the board described the proposed hotel and cottages development as "a small scale tourism-related undertaking" and said it would not "seriously injure the amenities of the area".