Developers the Skelwith Group has bought the estate on Sandsend Road, which was on the market for £4.7m, and has submitted a planning application to build Whitby's first 5-star resort.

Skelwith say it is expected that over 100 jobs will be created for local people at all levels.

The development will include a 42-bedroom hotel featuring a state-of-the-art spa and will be a sister hotel to the Skelwith Group's £100m Flaxby Country Club, located between York and Harrogate.

A fine dining restaurant and luxury bar will also be included, as well as a conference and function area to seat up to 180 people.

The spa totals 6,000 sq ft and will feature the latest treatments and technology, making it one of the most impressive in the North of England, according to the company.

The firm has submitted plans to Scarborough Council which will decide whether to give planning permission.

It hopes work will start in January with completion of the project expected in early 2010.

Paul Ellis, the Skelwith Group's managing director, said: "Raithwaite Hall will be a fantastic destination in its own right but will also be a perfect fit to complement the Flaxby.

"The area is crying out for a good quality hotel and spa to add to the heritage and history of the town and area."

David Andrews, chief executive of the Yorkshire Tourist Board (YTB) added: "Consumers are continually seeking higher standards of accommodation and this is exactly what the area needs.

"Whitby has a fantastic tourist offering so this development will only enhance the area and encourage visitors to spend more time and money in the town.

"It's good to see developers backing the future strength of the Yorkshire tourist economy."

All 42 rooms will be sold to individual investors and Skelwith Leisure, a specialised division of the Skelwith Group, will be developing the site.

There will be many tie-ups available with the site and the Flaxby such as helicopter flights between the two.

Currently there are 10 cottages in the grounds being let out to visitors and these would not be affected by the development.