Gilroes cemetery is to be extended to create about 160,000 extra plots, it was revealed today.

The extension is needed because otherwise the cemetery will run out of space for burials and cremated remains in about three years.

The plots will go on a 10-acre site at the rear of Gilroes, which is near Beaumont Leys, in Leicester.

The city council is to spend £420,000 on the project. The money will go towards the work needed to prepare the site, as the authority already owns the land, close to Anstey Lane.

The council's head of cemeteries, Richard Welburn, said the work would be starting in the coming months, but services at Gilroes would still be able to go ahead.

Gilroes deals with about 3,500 cremations and 500 burials each year. The new plot will be able to cope with the same level of deaths for up to 40 years – a total of about 160,000 plots.

Mr Welburn said: "We have two to three years room left at Gilroes based on predicted death rates.

"The worst case scenario would be to run out of space, so the intention is by starting work now we can have a transitional period of six months to a year to avoid that problem.

"This 10-acre site will last for between 30 and 40 years but after that this will be as far as Gilroes can be developed.

"In the next two years, we will be preparing the land which includes adding drains at about eight feet below the ground. We will also have new access roads to link the site."

Leicester City Council runs three cemeteries, Gilroes, Saffron Hill Cemetery near Saffron Lane, and at Welford Road Cemetery, near the University of Leicester.

Welford Road cannot be extended and only caters for families who already own an existing plot there.

Saffron Hill will be full in about 40 years time, so the council will have to find new sites or find other ways to cope.

However, from 2076, the council will legally be able to bury people on top of each other, if the original person's 99-year plot lease has expired.

Andy Connelly, the city's spokesman for culture, said: "We are not yet looking for new sites but clearly that is something we will have to do.

"We certainly wouldn't want to bury people on top of each other, so would need a new cemetery.

"We are not the only authority facing this problem. The issue is it can be difficult to find land because people living around it do not always like the idea."