Stanton Williams' controversial Sloane Square project in west London has been dropped.
Kensington and Chelsea Borough Council made the decision to shelve the £5.5 million scheme following mounting pressure from high-profile campaign group Save Sloane Square (SSS).
Stanton Williams was commissioned by the council to work up proposals to replace the existing 1930s roundabout with a new crossroads, which the practice claimed would increase public access and public space.
However, the designs were met with fierce opposition from the start, with the likes of celebrity residents Bryan Ferry and Lord St John of Fawsley joining the ranks of SSS.
The death knell was finally sounded after campaigners persuaded the council to look at an alternative proposal, which sees the roundabout kept intact.
Council leader Merrick Cockell said: 'My own view is that the crossroads scheme is an exciting one that would have improved Sloane Square by greatly increasing both the amount and the accessibility of usable pedestrian space, but it is clear that currently this does not carry widespread local support.
'The consultation has thrown up a mass of detailed concerns, many of them about traffic, and it would be irresponsible to proceed while people have these anxieties.'
He added: 'I will be recommending to my colleagues that we do not proceed with our favoured scheme and instead reflect on the mass of information and views that arise from the consultation.'
The decision has been welcomed by SSS, which now wants to see a more conservative revamp of the square.
Jill Hoyle, of the Milner Street residents' group, said: 'This decision will come as a relief to many of our residents. The council is to be applauded for listening to public opinion.'
Stanton Williams was unavailable for comment.by Richard Vaughan