The Isle of Wight's council is planning to team up with Portsmouth to invest £100 million into property.

Cabinet members have approved an investment strategy that could see the authority establish a commercial property portfolio that could realise returns of £5 million a year to protect public services.

Most of the £100 million will be invested in low risk industrial, office and retail properties, while 30% will be spent on 'higher risk' investments such as student accommodation, hotels and pubs.

A report submitted to the cabinet meeting suggested similar schemes had been used by dozens of other councils around the country. Reports indicate councils have invested £1.3 billion and seen returns of around 5%.

The report also indicated that cash-strapped councils had little choice but to become more innovative and find new ways to generate income to plug deficits in their budgets.

Cabinet member, Stuart Hutchinson, said: "Councils are gilt-edged. We can borrow at very, very low rates of interest. The experience of other councils is that this kind of investment has provided a very successful addition to their revenue raising requirements."

It was agreed the council should work with Portsmouth, which already has a scheme in place, as appointing an experienced property investment company would be expensive.

The recommendation to adopt the investment strategy will be put forward for approval at a council meeting held this week.