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Greenwich University could take over the old Greenwich Hospital site currently occupied by the Royal Naval College if a multi-million pound bid to the Ministry of Defence is successful.

The university first submitted a proposal to the MoD last October when it was announced that the Royal Navy might leave the 300-year-old buildings on the Thames.

The decision was made last month to move the college to Camberley in Surrey, and since then the university has prepared a briefing letter for Malcolm Rifkind, who is assessing the university proposal in his dual capacity as Defence Secretary and the Greenwich Hospital's sole trustee.

Greenwich Hospital is now a charity raising Pounds 3.5 million each year. It receives Pounds 400,000 rent from the Navy, which the university would be expected to take on. The Navy spends a further Pounds 2.5 million in running costs. On top of that, the department of National Heritage pays Pounds 2 million a year for the upkeep of the outside of the buildings, a national monument.

Deputy vice chancellor John McWilliam said that the university would take on the Pounds 3 million costs of the Navy "which could then go towards the front end of a frigate or two more rear admirals", and would pay "a significant part" of the National Heritage expenses. He said the university -- which is carrying out a detailed feasibility study -- would make "a significant revenue saving of around Pounds 2 million per year" by moving the health faculty and business school from eight scattered locations.

Mr McWilliam said it was "a heaven-sent opportunity". The university is trying to consolidate 22 campuses. But the MoD was only "lukewarm" about the proposals, he said, and the Navy still might stay at Greenwich Hospital, using it for a military language school or a training establishment for naval chaplains.