A £1 MILLION whisky distillery and visitor centre may be built at Mellerstain Estate near Gordon.
Scottish Borders Enterprise are currently carying out a feasibility study into the project and it is hoped that the study will be completed early in the New Year.
If the project gets the go-ahead it will be the first distillery in the Borders and it is hoped that a new lowland single malt whisky could be produced as early as 2008.
A shop and visitor centre would also be built at the distillery which is being seen as a potentially huge boost for tourism in the Borders.
Several sites were considered by the consortium behind the plan but Mellerstain has emerged as the front runner.
Owner of the estate, the Earl of Haddington, told the Berwickshire News this week that he was "very excited" by the proposal. "If we can get it off the ground it will be fantastic," he said.
"We are looking at maybe converting some of the old farm buldings although we would probably end up doing new build as it might be better for health and safety. It might not be so good to have farming operations going on round a distillery.
The Earl said that several sites were looked at but Mellerstain had emerged as the favourite.
"As far as I know every other place they looked at turned them down for various reasons," he said.
A good supply of water, essential for distilling whisky, runs through the estate in the shape of the Eildon Burn. There is also a freshwater spring. Mellerstain Country House is open to the public from spring until autumn and throughout the year for weddings and the Earl added that a distillery would be a "fantastic asset" to have on the estate.
However, he said that although the consortium were very enthusiastic they were still looking for investors. The consortium's adviser, Dr Alan Rutherford, said a number of locations along the A68 through the Borders had been considered.
He added that Mellerstain - although off that main route - had been earmarked as a potential site. He said the development could be modelled on other successful schemes in the north of Scotland.
"The idea was very much to boost tourism and to capture the tourists as they came up into the Borders. It is probably best to combine it with some sort of retail offering. I had in mind a retail centre rather like the House of Bruar something that would offer the best of Borders produce and manufacturing," he said.
A former head of the Scotch Whisky Association, he said there were a number of reasons why there had been no such development in the region before.
"I think the history of distilling is tied up with the history of smuggling and illicit stills," he said.
"It was probably more difficult to hide in the Borders than it was in Speyside or the islands."
He added that the proximity of distilleries in Glasgow and Edinburgh and agricultural issues may also have played a part.
A spokeswoman for Scottish Borders Enterprise confirmed they were supporting a feasibility study into the project and that the findings were expected in the New Year.
"We are going to look at whether or not there is any scope for the project but it is still in its very early stages," she said.
A Scottish Borders Council spokesperson said: "We can confirm that SBC's Economic Development Unit have been contacted by a representative from the consortium to discuss the potential for a distillery in the Borders. These discussions are at an extremely early stage and no definite locations have been identified."