Controversy surrounds a spiritual group that is set to take over a former school site.

Lewes Subud Group looks set to use the 4.4-acre site of derelict St Anne’s School, Lewes, for community use but residents and councillors think it is needed for housing.

The group, a registered charity and part of an international movement, hopes to build two halls for spiritual exercises, a meeting room and a community cafe as well as “eco lodge” rooms for tourists.

Subud won the site in May 2013 even though its bid to East Sussex County Council (ESCC) was not the highest financially.

Residents have criticised the decision on the Lewes Forum website, aghast that what has been described as a “cult” or “sect” has been put before housing.

Annabella Ashby, of Lewes Subud Centre, said: “We have Jewish, Christian and Muslim members. We are not a sect.”

She added that the land will still be open access.

ESCC discouraged residential bids for the land and had concerns about housing.

Lewes councillor John Stockdale said the land could take 40 new properties.

He said: “It is probably the best site in town. It is galling as we are struggling to build good housing in the area.”

Subud’s bid was awarded last October. It intends to hold an event in September for people to have a look at its plans and aims for planning permission by February.

An ESCC spokesman said: “We felt it was important that the community was represented in choosing the bid, so an assessment panel was formed.

“Subud was unanimously chosen as the preferred bid.

“When we dispose of a site it’s important we consider not just the financial value from its sale but the best benefits for the community.”

ESCC expects the deal to go through in the next few weeks. Subud would then have to submit a planning application to Lewes District Council.