A 38-storey £100 million tower - the tallest in Sussex - could rise from a derelict factory site.

The 400ft skyscraper with 500 flats has been designed by Brighton-based City Gateway Developments for Portslade.

It would dwarf Sussex Heights, presently the city's tallest building at 330ft, and its 38 storeys would also rise above the modern blocks proposed for the King Alfred site a mile away in Hove.

It would include 200 low-cost homes, a health and fitness club, showrooms, restaurants, a media centre, dance studios and offices.

Developer Gateway says it could attract national and international companies to the city as well as creating much-needed additional housing.

The company said its high-profile development would also help to regenerate south Portslade and create hundreds of new jobs.

It is planned for the site of the former Flexer Sacks factory on a prominent site on the A259 Coast Road, close to Shoreham Harbour.

The factory closed in 2000 when the long-established local firm moved to Scotland.

The development is being managed by Ghiaci Goodhand Smith from Hove, whose spokeswoman Rachel Furlonger said: "Our city needs to attract more national and international companies in order to compete on the national stage, generate more jobs and raise the standard of living for residents.

"Major steps have been taken to improve our city but we are still not attracting corporate headquarters because of the lack of quality sustainable developments.

"We hope the development of City Gateway will be the first step towards Brighton competing on a national stage."

An earlier lower-level proposal for the same site was given permission by Brighton and Hove City Council last year.

This was for a health and leisure club, recording and dance studios, offices, workshops and showrooms.

City Gateway will shortly be submitting its new application for the site after extensive consultation with the council.

It purchased the land through Oakley Commercial early last year.

The Brighton-based agents have now been retained as development consultants.

Chris Oakley, of Oakley Commercial, said: "There have been a number of high-rise developments proposed in the city.

"But City Gateway is unique because it is surrounded by commercial uses and in an area that requires regeneration rather than imposing upon smaller-scale residential areas.

"While the vision for Shoreham Harbour is under review, this private enterprise will be a major step towards regeneration which we hope will have a kick-start effect."

Mr Oakley said the scheme should be acceptable to the council under its tall buildings policy.

Deputy council leader Sue John, who represents South Portslade, said: "It is an exciting proposal and could be the right place for a mixed development on a gateway to the city."

She said it could start regeneration of the nearby harbour but consultation was needed first with the neighbourhood.

Economic development councillor Don Turner said: "This project can have a significant effect on the economy of Brighton and Hove and help to solve our housing problems.

"As a Portslade councillor and resident, I am particularly pleased to see City Gateway is committed to improving the western end of the city.

"I am also impressed with the way council officers and Ghiaci Goodhand Smith have worked together on developing this site.

"There is still a lot of work to do, including local consultation, but I hope a well-designed landmark building will be built on this semi-derelict site."

Crispin Williams, of Brighton-based consultancy Boathouse Studio, who prepared the illustration, said: "We believe the project is a must-have landmark that will symbolically define the western approach to the city."