Plans to create an international literary hub in the heart of Norwich have been recommended for approval by council bosses.

The £8.5m revamp of Grade II-listed Gladstone House in St Giles Street could establish a world-class centre for literary study, translation and performance, according to Writers' Centre Norwich, which is behind the plans – though concerns have been raised by heritage groups.

A new 120-seat auditorium for book readings would be built in the gardens of the house, which was built in the late 18th century, and the later rear annexe demolished, with apartments built for a writer and translator in residence. Teaching spaces, a private basement bar and a cafe are also included in the new-look building.

But English Heritage has opposed the plans, on the basis that some of the alterations lack 'clear and convincing justification', and the Friends of Gladstone House campaign say the new auditorium would block views of the building's south facade.

Chris Gribble, chief executive of Writers' Centre Norwich, said the new centre would build on Norwich's status as a Unesco City of Literature – one of only seven worldwide.

'This will be an important piece of cultural infrastructure for the city.

'It will bring money into the city and raise our profile on the national and international stage, and give people access to the best writers and storytellers in the world,' he said.

'We understand people will be anxious about it, but we are committed to working with with the city council, the conservation department, English Heritage and other groups to make sure we get it right.

'We want to open a building that people haven't had access to for decades. We are planning on being there for a long time, and planning to create something for the city and the people. It has to be appropriate for Norwich as that's what the city expects.'

The building would be leased free of charge to the centre by Norwich City Council, which would retain ownership, and the work would be funded by a £3m Arts Council grant, smaller contributions from Norfolk County Council, the University of East Anglia, which is a partner, and trusts and foundations. The remainder of the £8.5m cost will need to be raised before planned work begins in summer next year, for opening in October 2016.

Civic watchdog The Norwich Society is in favour of the proposals, but has reservations over the auditorium's positioning, noise and light emissions, and has asked for them to be considered in detail before a decision is made.

Thomas Ziolkowski, a spokesman for the Friends of Gladstone House campaign, said: 'The plan to substantially harm Gladstone House as proposed and build a new auditorium obscuring most of its beautiful south facade from public view is definitely not the best and most approporate way to conserve this beautiful building.'

Planning officers have backed the proposals in a report to Norwich City Council's planning committee, saying the project has 'notable benefits in terms of strengthening the cultural status of Norwich'.

Opening the garden to the public and reviving an underused building must be balanced against the harm Gladstone House, they say, but they reach a conclusion that it 'is necessary in realising the optimum viable use'.

A decision will be made by Norwich City Council's planning committee on Thursday morning.