A Glasgow tower block that had been due to be demolished is to be saved and transformed into new-look homes in a £7million revamp.

The 22-storey block in Ibrox will be refurbished in a programme aimed at young professionals and key workers, such as nurses and staff at the nearby Southern General Hospital.

Glasgow Housing Association has been allocated £1.1m towards the Ibrox project by Infrastructure Minister Alex Neil as part of a £55m Innovation And Investment Fund from the Scottish Government.

It was looking to invest in new ideas to create a wide and varied housing stock.

The block at 15 Ibroxholm Oval, which was built in the 1960s, will be spared demolition, while two other neighbouring blocks will be brought down to create land for other regeneration work in the future.

GHA, which will fund the other £5.9m, will offer the flats at "mid-market rent" aimed at young professional people who are not ready to buy a home.

There will be 98 one and two-bedroom homes in the building.

Announcing the cash for councils and housing associations across Scotland, Mr Neil said: "The public purse is under huge financial strain, so we need innovative approaches to increase housing supply at maximum value for taxpayers' money.

"We called for fresh ideas and councils, housing associations and private developers have risen to the challenge magnificently.

"Housing associations have embraced the new financial reality by proposing developments delivered at subsidy levels that would have been unthinkable a few years ago."

GHA said it hoped the development would help widen homes opportunities and offer more choice for more people.

Alex McGuire, GHA's executive director of development and regeneration said: "Not everyone can buy in the current market and our research shows there is strong demand for homes with mid-market rents.

"That's particularly true in Greater Govan, where regeneration is bringing a lot of people into the area to work.

"The flats we develop at 15 Ibroxholm Oval will be good quality, spacious homes with rents young professionals and key workers like nursing and medical staff will be able to afford."

Long-term tenants will later be offered the chance to buy their home.

Preparation work to demolish the other two blocks is already under way and it is hoped work will start renovating the remaining one early next year.

The tallest demolition machine in the UK will be used to bring down the blocks chunk by chunk, similar to an operation carried out at nearby flats at Broomloan Road.

The work will add to the new build housing in Govan. GHA has two such developments with 80 homes almost complete at Holmfauldhead Drive, and work under way on 47 homes in Summertown Road.

In total Glasgow got more than £2.2m from the £10m Innovation Fund as part of the overall £55m Investment and Innovation Fund.

Cash of £360,000 was also given to GHA to take over 24 homes to offer for rent in Lambhill, in the north of the city, and another £840,000 went to developer CCG Homes for 24 homes in Tantallon Road, Shawlands.

Mr Neil said he expected the fund to create 2700 homes across Scotland and save the taxpayer around £13m in subsidies and create 3000 jobs.

And £3.9m will create 108 homes

By Ewan Fergus

More than 100 council houses will be built in Renfrewshire thanks to the Scottish Government's Innovation And Investment Fund.

The council has been awarded £1.1million to build 37 homes on the site of the former Castle House care home in Barrhead Road, Paisley.

In addition, Sanctuary Scotland Housing Association has been given £2.8m to build 71 homes in Gallowhill.

Councillor Kenny MacLaren, convener of the council's housing and community safety policy board, said: "More people than ever are struggling to find affordable homes for rent, so these will be a welcome addition to the range of housing options available locally."

The Castle House site already has planning permission for housing, and had previously been targeted for sale to private developers, but no deal was agreed.

Of the 37 homes, 22 would be for general needs purposes while 15 would be grouped amenity properties for older people.

Sanctuary Scotland is also the development agent for the site.

Councillor MacLaren added: "These will be the first new general needs council houses built in the area for about 30 years."