An abandoned settlement, now surrounded by plantation forest, in the NE of the Isle of Bute, Balnakailly is located a half-mile (1 km) west of Rhubodach. The walls of a cottage and associated byre stand to a height of 1.5m (5 feet), and there is evidence of other dwellings. The settlement seems to have been abandoned c.1850.
The area around Balnakailly gained a new use during World War II as a decoy site, intended to draw German bombers away from Greenock, Clydebank or perhaps more likely, the naval facilities at Rothesay and Port Bannatyne. This facility was operated by the Royal Navy as part of the Starfish network and comprised a series of lights which were illuminated at night, together with fires intended to mimic incendiary bombs dropped by pathfinders to guide the main bomber force to a target. Three concrete bunkers remain hereabouts, used to control the site.
Today, the Balnakailly Loop provides a circular diversion from the West Island Way. The Balnakailly Burn descends from the North Hill of Bullochreg, 1½ miles (2.5 km) to the south southeast, to flow into Balnakailly Bay, a quarter-mile (0.4 km) to the northeast.
