A 17-storey tower block could be built on Aberdeen’s Union Street to encourage people to move back into the city centre.
The soaring residential development is among options on the table for the former BHS department store, which has lain empty since August.
Town house figures see the demise of the chain as a “great opportunity” to better link up the Granite Mile with the historic cobbled lanes of the Merchant Quarter.
It could have major implications for the indoor market, which is owned by the same firm as the former department store premises and several neighbouring properties.
Aberdeen City Council this week approved spending on a feasibility study into the benefits and risks of joining forces with London-based owners Rockspring.
The results will be presented to councillors in February.
Rockspring said it was “exploring exciting options” that could “play a major role” in revitalising Union Street and the city centre.
It has previously said it was in discussions with “a number of international retailers” about taking over the space to boost shopping options.
Shaun Hose, asset manager at Rockspring, said the revamp was “in the early stages of development” and detailed plans “will be shared with all stakeholders and the public for consultation in due course”.
But the Press and Journal understands the focus is on the idea of building upwards from the retail space to provide new homes in the heart of the city.
A senior source revealed that a striking centrepiece “significantly taller” than anything else on the shopping thoroughfare was being looked at.
The huge vacant store presented a “great opportunity to fulfil one of the ambitions of the city centre masterplan”, they added.
The authority’s regeneration blueprint, approved last year, argued that making the area more residential would help foster a “vibrant” culture.
It also cast doubt on the future of the “increasingly tired” and neglected indoor market, which is home to a number of small businesses.
The “brutalist” design, it argued, was out of keeping with its historic surroundings which could be revitalised by improved access to Union Street.
“The site is a significant development opportunity that should better address and animate the Merchant Quarter and Union Street,” the masterplan concluded.
Finance committee convener Willie Young said: “The council is currently considering a number of key sites across the city which, with the right development and investment, could enhance connectivity, bring economic benefits and increase city centre living.
“We are working with the private sector to explore opportunities to unlock such potential and the former BHS is one of the key sites.”
SNP opposition leader Stephen Flynn said it was right for the authority to investigate the options, including ways to increase housing.
But he said that the Labour-led administration’s past record meant that until detailed plans were put forward, Aberdeen residents would fear ending up “with another Marischal Square monstrosity”.
Councillors stressed that no decisions had been taken about the market and local businesses would be consulted on any future plans.