Bed and breakfast accommodation could return to the Royal Oak pub in East Wittering.
A proposal to demolish the community asset building to make way for ten homes was turned down in November after concerns about a loss of amenity to the area.
A revised application put in last week instead proposes to keep and refurbish the pub and split it into a collection of eight holiday lets.
An additional terrace of nine homes and a bungalow would then be built adjacent to the pub to ‘infill’ the residential street by demolishing the shop next to the pub previously occupied by dog grooming business Canine Clips.
The majority of the homes in the terrace would be flats, alongside a three-bed and a four-bed house.
East Wittering and Bracklesham Parish Council is due to discuss the plans at a planning meeting on February 19.
See application reference 18/00016/FUL