Forth Ports, the £1 billion quoted ports operator, is planning to build an Edinburgh eco-town hewn from recycled shipping containers, the largest of its kind in Britain.

The new complex will be built on the waterfront at Forth's Leith Docks, housing up to 300 units for both living and office use. Forth Ports expects the units to be divided into two neighbouring villages and to act as a forerunner for plans already submitted to the authorities to build about 16,000 new homes around the Leith Docks.

Charles Hammond, chief executive of Forth Ports, said he had drawn inspiration from a visit last year to the small Container City project in East London, home to 37 units in neighbouring sites.

Mr Hammond had just returned from a visit to the company's Tilbury Docks and decided he could take the concept on a larger scale to its Leith Docks. He said: “Ours will be both live and work units. They could be offices for small businesses and units for those who like to live in something more eco-friendly and those who like working from home.”

Forth Ports' designs are at an early stage for building units and designing the layout of the villages. The units are however likely to be assembled “like Lego blocks”, Mr Hammond said, possibly stacked up, allowing for quick and easy transport of the entire village around the Leith site every few years, to dovetail with the construction of conventional housing, shops and schools in nine new villages.

The containers are likely to be cut out on one side and welded to another to allow for simple two-room units, with an office and living quarters.

Forth Ports is likely to start by letting the units on short-term leases at cheap rents for artists and workers in the creative industries. However, the units could eventually be sold on long leases, or freeholds, over the next two decades once the main housing development takes shape and the container units find a permanent home.

Mr Hammond added: “I think they will start off for temporary use, attractive to the creative industries. It will act as a point of identity for Leith. While they will be moved around as the development progresses, they could end up a permanent fixture over the next 20 years.”

Forth Ports has already recruited RTKL as architects for the main Leith housing project and it submitted an application for outline planning permission last September. If approved, it will be the largest new homes project in Edinburgh since the construction of the city's New Town in the 18th century.

Mr Hammond said he was likely to award the contract to design the container project to a local architecture firm in the next few months. He said: “We would like to work collaboratively with local people on design. Everything will have to be built to be environmentally sustainable. This will be a standalone planning application.”

Forth may also work with some of the large container companies to work on branding the units. The largest on the market are 45ft by 45ft blocks, patented by Samskip, the Icelandic container maker. Other big container makers are MSC, the Italian company, and Mersk of Denmark.

Forth Ports has yet to name its container villages. “I am happy for suggestions on a postcard,” Mr Hammond said.

Babcock & Brown, the Australian infrastructure fund operator and owner of a large portfolio of European ports, this month more than doubled its holding in Forth Ports to 20.4 per cent, intensifying City expectations of a full bid for Britain's last quoted operator.

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