The first stage of plans to replace a dilapidated school building with a multi-million pound 'eco' primary will begin this autumn.

Pelton Infant School and Pelton Junior School have been in need of repair for some time. The buildings date back to 1901 and have been at the top of Durham County Council's priority list for replacement.

But in September this year the first steps in regenerating the schools will begin, when they are merged and an additional 39 place nursery unit created.

The work has been spurred on by the education authority's successful bid to secure £2m of funding from the Government, which will meet most of the costs of a new school. The £3.078m eco-friendly building for the merged schools is expected be completed by January 2005.

The scheme was officially rubber-stamped by the council's School Organisation Committee on Friday.

The new building will include the latest designs and environmentally-friendly devices. There will be built-in security measures, solar power, water recycling and bio-fuel boilers. There will also be an information technology suite, a place for special needs teaching and provision for out-of-hours kids' club.

Once it is in use, the old school buildings will be demolished and replaced with a playing field. Nearby Pelton Fell is also set for some regeneration work, after Chester-le-Street District Councillors recently agreed to a plan to redevelop the area.

A large number of homes on Pelton Fell's Whitehill estate are derelict and are proving magnets for vandals and anti-social behaviour.

The council has set itself a March deadline for drawing up a development brief for the area, in consultation with the council and local residents. Developers will then be appointed to initiative the regeneration work.

Portfolio holder for housing Coun Linda Ebbatson said: "I am very encouraged by the executive's support on these recommendations, it is only through partnership with local residents that we can be assured of successfully regenerating this area." .