New design approaches are proposed for the LHD-type heliotron D–T demo-reactor FFHR2 to solve the key engineering issues of blanket space limitation and replacement difficulty. A major radius of over 14 m is selected to permit a blanket-shield thickness of about 1 m and to reduce the neutron wall loading and toroidal field, while achieving an acceptable cost of electricity. Two sets of optimization are successfully carried out. One is to reduce the magnetic hoop force on the helical coil support structures by adjustment of the helical winding coil pitch parameter and the poloidal coils design, which facilitates expansion of the maintenance ports. The other is a long-life blanket concept using carbon armour tiles that soften the neutron energy spectrum incident on the self-cooled flibe-reduced activation ferritic steel blanket. In this adaptation of the spectral-shifter and tritium breeder blanket (STB) concept a local tritium breeding ratio over 1.2 is feasible by optimized arrangement of the neutron multiplier Be in the carbon tiles, and the radiation shielding of the superconducting magnet coils is also significantly improved. Using constant cross sections of a helically winding shape, the 'screw coaster' concept is proposed to replace in-vessel components such as the STB armour tiles. The key R&D issues for developing the STB concept, such as radiation effects on carbon and enhanced heat transfer of Flibe, are elucidated.