The developer overseeing a forgotten 400-seat underground theatre beneath Islington Green has withdrawn an appeal that if won could have removed a requirement to actually open it.

Islington Gazette: An artist's impression of how the theatre could look. Picture: Foster Wilson ArchitectsAn artist's impression of how the theatre could look. Picture: Foster Wilson Architects (Image: Archant)

Berjaya UK Investment and Development turned to the Planning Inspectorate last year after learning Islington Council was set to reject its latest planning application.

The town hall says there was a "fundamental objection" because Berjaya wanted to ditch an agreement dating back to 2002 that requires the venue to be opened.

But in November the appeal was shelved, casting doubt on the development's future.

The £35million theatre, under the old Collins Music Hall - now Waterstones - was constructed as an Elizabethan courtyard-style venue. The plans were signed off in 2002 and included building 72 flats to pay for the theatre.

However, a row between the previous owners stopped the project in its tracks. The flats are there, but the theatre has been left in shell form since it was finished in 2008.

Berjaya had claimed there was nothing wrong with its plans and said it had a theatre operator - Shawthing Productions - in place until the council "interfered" with negotiations.