Protection of business space in the borough is out of town hall hands after a legal challenge against the government failed.

Islington Council lead the fight against the General Permitted Development Order – the decision to relax planning laws in May which allows office space to be changed to residential without council approval.

The legal challenge, supported by Camden and Richmond upon Thames councils, centred around the way the government handled the process for seeking exemptions from the new permitted development rights, which the boroughs argued was unfair.

As well as losing jobs, the council is concerned the new rules will prevent them from controlling the type of housing offices are changed to, denting its target of 50 per cent of all new homes being affordable.

‘Reckless’

The only area exempt from the ruling is the Central Activities Zone which covers parts of Finsbury, Clerkenwell and St Luke’s.

Islington has already received 58 notifications of offices being changed to residential use, and plans to turn the council’s offices at Highbury House into 35 flats were submitted earlier this month.

Cllr James Murray, Islington Council’s executive member for housing and development, said: “This government policy has created a reckless free-for-all in the planning system. We are very concerned about its impact and so we are disappointed by the outcome of this case.

“The loss of all these offices is damaging our local economy and it’s not producing the sort of homes we need.

“There is no control over the quality or size of the new flats, and they don’t include any affordable housing at all – a fact the judge felt was worrying and that we know is very bad news for Islington.”

The legal challenge was heard at High Court on December 4 and the decision was made on Friday.

Mr Justice Collins, who gave the verdict, said the he understood the concerns which led to the claims by the boroughs, and added that “the lack of any requirement for affordable housing is worrying”.

However, his overall conclusion was that the government’s actions were not unlawful.