Officials are recommending that councillors back the masterplan by city architect John Hope for a swathe of shops, offices and 330 homes across a massive campus owned by Edinburgh University and bordering the Royal Mile and Holyrood Road.
Hope's design, to be debated tomorrow by Edinburgh City Council's development quality subcommittee, also earmarks new academic buildings, conservatories, and underground parking for the site near the Scottish Parliament.
However, conservationists are becoming increasingly concerned about the scheme's density, fearing it will obscure views of listed buildings, including 17th-century tenements just off the Royal Mile.
Anxiety over the future of Edinburgh Old Town has been fuelled by Alan Murray's controversial Caltongate development which campaigners say will destroy several historic buildings. Murray's new development aims to bring 2,500 new jobs, 200 new homes and a new public square to the run-down area.
Commenting on Hope's scheme, the Edinburgh World Heritage Trust said: 'Any new development for these sites must acknowledge the historic scale and character of the area.'
Meanwhile Historic Scotland, in its submission to the council, has aired disquiet over the size of the masterplan.
'We would hope that the later detailed design and materials chosen would respect the setting of listed buildings,' the submission states.