A “MONSTER” development that would have dwarfed the iconic Union Chapel has been thrown out.

A housing provider wanted to bulldoze a former car showroom in Canonbury Road, Islington, and erect three new buildings – the tallest of which would have been seven storeys high.

Notting Hill Home Ownership claimed that the development’s 134 flats - 64 of which would have been affordable - and two commercial units would have been a vast improvement on the existing structure.

But campaigners feared the new buildings would dwarf the Grade II* Union Chapel in nearby Compton Avenue.

The octagonal building dates back to 1877 and is both a working church and a leading music venue that has seen the likes of X Factor winner Alexandra Burke perform on stage.

The proposals have now been thrown out by The Planning Inspectorate.

Inspector Frances Mahoney said: “Union Chapel is a building of such quality, finesse and stature that it has been identified as a local landmark.

“The proposed development would harm the character and appearance of the area and would unacceptably diminish the setting of the Union Chapel, harming its special historical and architectural interest.”

Liberal Democrat councillor Susan Buchanan, who represents St Mary’s ward, welcomed the decision.

She said: “The proposed building was too high and too large. It would totally have swamped the beautiful Union Chapel and the conservation area.

“The Union Chapel in particular is one of the borough’s architectural gems and the conservation area around it recognises this.”

Notting Hill Home Ownership, which particularly specialises in shared ownership homes, had appealed to The Planning Inspectorate after Islington Council rejected its planning application in March this year.

It said: “The existing buildings on the site do little to enhance the setting of the surrounding heritage assets and arguably detract from them. The scale of the proposed building relates to those within the surrounding area and the layout seeks to enhance the view of the Union Chapel through the central landscaped garden. We are therefore of the view that the proposals enhance the settings of the historic assets.”

Notting Hill Home Ownership is now planning to submit a revised application to Islington Council.

A spokeswoman said: “Obviously we are disappointed in the overall decision to refuse, but the inspector provided very clear guidance about what would make an acceptable design for the site. Based on this guidance, we intend to submit a revised scheme to the council very soon in the New Year. We remain confident that a modified application will achieve planning consent in due course.”