A blunder by the Government could help the town hall land a decisive blow against controversial new office to flat conversion rules.

Islington Council have led the fight against the legislation, which allows developers to turn office space into dwellings virtually at will, since it was adopted last May.

Initially the borough asked to be made exempt from the new rules, then revised the request to just having parts of Islington excluded.

The Government said no, claiming the council hadn’t built enough new homes to fill their required quota.

But the town hall always said the Government’s figures were flawed, and now the Department for Communites and local Government has admitted the gaff and agreed to quash their original decision.

Cllr James Murray, said: “No-one would deny that London needs new homes.

“We are one of the top boroughs nationally for building new homes - we’re actually building thousands of genuinely affordable homes for social rent.

“The Government says its policy is about converting empty offices into homes.

Yet in Islington, we can see the damaging effect this policy is having. We’re losing jobs but getting lots of one-bed and bedsit flats, with no affordable housing or other community benefit.

“I am pleased [Secretary of State] Eric Pickles accepts his department made a mistake, and I hope this means we can now have a proper discussion about how we can protect jobs and provide decent, affordable homes in Islington.”

A total of 71 office buildings in Islington, including the infamous Archway tower, have already obtained prior approval for conversion, and it’s thought these will go through regardless of any future Government decision.

The town hall estimates the loss of office space is around 45,000 sq metres, capable of accommodating 3,000 to 3,500 jobs.

They say about half of this space was occupied by small businesses and charities.

Brandon Lewis, Housing and Planning Minister, said: “It is disappointing that Islington is using public funds to try to oppose new homes for Londoners. “Their latest judicial review attempt relates to a technical point on housing numbers in London.

“We are happy to have a dialogue with the council on these issues, but we have been clear about the real need for more homes, especially in London.

“However, Islington council are out of touch if they think more one-bedroom and studio flats in central London for young people are a bad thing.”