�A massive seven-storey development that would bring another influx of students to Finsbury Park is in doubt.

The 475-bed scheme in Morris Place has been thrown into question after the government performed a U-turn on its decision to allow the plan.

Lawyers from the Treasury Solicitor’s Department admitted a ruling by a government planning inspector, which overturned Islington Council’s original rejection of the proposal, was unsound.

The council was set to fight its corner at the High Court in May but will now not be challenged.

Paul Convery, Islington Council’s executive member for planning, said: “The inspector simply ignored our very clear policy of only allowing student developments next to the universities. When I read the appeal decision, my jaw hit the table in disbelief because it was so obviously wrong.”

Family-run framing firm John Jones, which is based on the site and has framed works by artists such as David Hockney and Francis Bacon, wants to build the flats to fund a new studio.

Excessive

Cllr Convery added: “John Jones is a great business and if we were not having this dispute, we would be best of mates.

“But we want a better mixture of residential and affordable housing on that site.

“We already have an enormous amount of student accommodation in Islington with more than 8,000 units built in the past five or six years.

“Excessive concentrations of students can be very disturbing to neighbourhoods and put a lot of extra strain on all sorts of facilities.”

Another planning inspector will now have to take a fresh look at the plans if the company still wants to pursue the project.

Kate Jones, sales and marketing director at John Jones, said: “It was a year ago that planning permission was granted and it’s frustrating that our growth plans are continually thwarted by Islington Council.

“We are actively trying to grow our business and recruit more staff at a time when this country needs to push forward with getting its economy back on its feet.

“We don’t understand Islington’s priorities and are both concerned and frustrated by their actions.”

The company’s founder John Jones was made an MBE for his services to the arts in the New Year Honours’ List in January.