Gallery plan proposed for Edinburgh's Sick Kids Hospital

Former banking consultant Robert McDowell would also create a Festival museum and space for artists and creative industry start-up businesses.

He has put in an initial bid for the site, which the hospital is due to vacate next year when it moves to a new building next to Edinburgh Royal Infirmary at Little France.

But he faces competition from property developers and a potential community buy-out.

Mr McDowell said: “This is a wonderful building and site which has been of great public service for the best part of a century and a half, saving so many children’s lives. It should be recycled somehow or other for public use again. I’m prepared to try and back that and have a go.

“You hear of so many public buildings being turned into flats and banks only lending for property. I’m trying to give a signal that there are more things we should be thinking about. We have to think about intellectual and cultural life and not just think the only business in town is property development.”

The gallery of children’s art would be at the heart of his plans. He said: “When you walk through the corridors at the moment they have little drawings and paintings everywhere.

“There is nothing that moves you more than the art children produce when they are experiencing difficult times and trauma and trying to understand life.

“I don’t think there’s a museum anywhere that does that.

“Edinburgh has also been crying out for a long time for a museum of the history of the Festival, which of all the cultural things in Edinburgh is the one thing that is way ahead of everything else worldwide and is the reason millions of people come to Edinburgh.”

He said he expected the site to go for £15m-£25m. “We would have to come up with a good price that’s competitive.

“We’ve got to see how we can free up and garner the finance, but what we have said is we can be very flexible – if they want to take longer over the move of the hospital we are happy to give them that flexibility.”

Mr McDowell said the success of Summmerhall – the former Dick Vet School which he transformed into a venue with 700,000 visitors a year and employing 500 people – strengthened their case.

“We’ve done it already. It’s close to where we are, we have a lot of experience and a whole management team.”

The closing date for initial offers was Thursday last week and health bosses are expected to draw up a shortlist over the next few weeks.

Iain Graham, director of capital planning and projects, NHS Lothian, said: “We received a number of offers for the site. These offers will be analysed over the coming months before a preferred purchaser is selected. No decisions have been taken yet and a formal consultation will take place once a preferred purchaser is selected in early spring.”