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Plans for a £300m rehabilitation centre to help wounded British troops have taken a step forward.

A feasibility study concluded the proposed Defence and National Rehabilitation Centre would improve care, Defence Secretary Liam Fox said.

The centre would be near Birmingham's Queen Elizabeth Hospital and replace Headley Court, Surrey.

The Duke of Westminster, who funded the study, has bought a test site at an undisclosed location in the Midlands.

Officials said that had been done so the authorities could investigate planning permission for the project.

The new centre would open in 2017 if approved by ministers.

Its funding is likely to be provided by the Duke, the Ministry of Defence and service charities the Royal British Legion and Help for Heroes.

Birmingham's Queen Elizabeth Hospital is home to the Royal Centre for Defence Medicine, where wounded troops are brought for medical treatment. It was visited by the Prince of Wales and the Duchess of Cornwall last year.

Dr Fox said in a written ministerial statement: "The existing defence rehabilitation facility at Headley Court, established in 1947, is widely admired for achieving remarkable results for those injured in conflict.

"It is important that defence is in a position to benefit to the maximum degree from advances in technology and science.

"Realising the full benefits of such advances will not be possible in the medium to long term because of the physical constraints of the Headley Court site."

Surgeon General Vice Admiral Philip Raffaelli said: "The potential establishment of a defence and national recovery capability is a very exciting opportunity.

"[It] will contribute to the improvement of care for our wounded and injured service personnel and to the advancement of rehabilitation medicine in the UK."