Arsenal Football Club has lost its appeal to build a 25-storey skyscraper next to its Emirates Stadium.

Judges threw out an appeal lodged by the club to build the tower, complete with 400 student bedrooms, in the shadow of their Emirates Stadium in Hornsey Road, Holloway.

The decision follows a three-year legal battle over the plans between the club and Islington Council.

Town Hall chiefs initially refused planning persmission in 2011 but a Government inspector overturned the decision after Arsenal appealed.

The town hall immediately launched a legal challenge in the high court and a judge threw out the inspector’s ruling, which meant the appeal had to be re-heard.

In giving his judgment this morning (Monday) at the Court of Appeal, Master of the Rolls, Lord Dyson, said: “In my view the judge was right to quash the inspector’s decision. The main issue before the inspector was whether the 25 storey tower would harm the character and appearance of the area surrounding the site.”

He said that the inspector did not weigh up the impact of a having a 78-metre high tower in the area, which, under planning policy, is deemed inappropriate for Islington’s predominantly low-level buildings.

Lord Dyson added: “I would, therefore, dismiss the appeal. Subject to any further representations from counsel, I would remit the matter to the Secretary of State for reconsideration in the light of this judgment.”

A spokesman from Arsenal FC said the Club is now considering its next steps.