South Hams councillors are set to vote on whether to become a multi-million pound players in the national property game, despite warnings that if it all goes horribly wrong the district council could end up almost bankrupt.

The district council is planning to borrow up to £80m – the equivalent of £1,000 for every man woman and child in the South Hams – to build a property portfolio.

The aim is to invest in retail, office, leisure, health, energy and industrial assets around the country and use the income to help keep the council’s finances in the black.

Last week, the council’s overview and scrutiny panel and its executive committee voted to press ahead with the controversial proposal.

They were both recommending Thursday’s meeting of the full council to give the go ahead to set up a procurement process for the new property strategy and borrow the first £26.75m tranche of the £80m.

The recommendations were made despite warnings that the retail property market was notoriously fickle; other local authorities already going down the same road were creating a financial “bubble” in the property market; and there were question marks over whether the council was even allowed to borrow cash from the Government for this kind of investment.

And councillors were told they would be better off spending the money on building affordable homes for local people.

Liberal Democrat councillor John Birch, who spoke against the proposals, said: “This is a gamble. It is high risk and it is something that we as a council should not participate in.”

And he warned if the council borrowed the cash and then found that they and all the other investing councils had to suddenly repay it because of changes to government borrowing rules “we would have to sell this property as the bottom falls out of the market”. He was supported by Conservative councillor Rufus Gilbert who warned it was a “very, very, very high risk area to go into.”.

And he said the council should consider “more fully” the returns it could get “on building affordable homes for local people”.

But the council’s Tory leader John Tucker told the executive: “There are lots of ifs and buts but sometimes you have got to take risks.”

Liberal Democrat councillor Julian Brazil said: “The idea of investing in an office block in Birmingham to get some extra money is just not what this council is about.”

But Cllr Keith Wingate said: “I am very much aware of the risk but I think that it can be handled.”

He said some people might look at it as lumbering residents with a “millstone around their necks for the next 40 years. However, he said, “we might be giving them a golden handshake”.

We hope to bring you the outcome of Thursday’s meeting either later that day or on Friday.