The Priory is best known for helping celebrities such as Amy Winehouse, Kate Moss and Pete Doherty recover from drug and alcohol addiction. But the psychiatric hospital chain could soon be catering to less glamorous patients as part of a planned shake-up.

Philip Scott, Priory’s new chief executive, said the company is looking to set up a chain of nursing homes to capitalise on the burgeoning UK elderly care market.

“Priory is an incredibly strong brand,” he said in an interview with the Financial Times. “Unlike psychiatric care, the demographics behind the UK elderly care sector are extremely strong and there is less pricing pressure.”

The move will see Mr Scott return to familiar territory. As chief executive of Southern Cross until late last year, the 44-year old Irishman was responsible for transforming a 4,000 bed outfit into the UK’s largest nursing home operator, with 36,215 beds and 2007 sales of £731.9m.

Mr Scott aims to acquire 500 beds for the Priory by the end of this year and said he wanted sales from the nursing home division to account for 20 per cent of group revenue in three years.

The UK nursing home sector is estimated to be worth £12bn a year, according to Laing and Buisson, a healthcare consultancy. This may more than double over the next 30 years as demand from an ageing population rises and the number of homes available falls as older sites disappear.

The Priory runs 28 clinics and claims to be Europe’s leading provider of acute and secure mental health services with an emphasis on rehabilitation.

In spite of its image as a celebrity hideaway, acute psychiatric care is its biggest source of revenue, making up 40 per cent of sales in 2005.

But the sector has come under pressure as the NHS moves towards more out-patient treatment and private insurers reduce psychiatric coverage.

Mr Scott insisted that Priory has turned a corner. The group, acquired by ABN Amro, now owned by Royal Bank of Scotland, for £875m two years ago, is understood to have £900m of debt.