Housebuilder Barratts had originally lodged an appeal against the local borough council for failing to make a decision about the project for 268 new homes on the site in the downtown area of Rotherhithe, to be designed by architect Proctor and Matthews, within the given timescale.
However, following a public inquiry in April, the independent inspector sided with worried local residents and the council in rejecting the controversial high-rise development.
Now, Kelly has effectively paved the way for the demolition of an existing health centre which will be replaced by a high-density housing scheme including affordable units, car parking and two community buildings.
Contrary to the inspector's findings, Kelly felt the project's overall design would outweigh 'the conflict with the development plan over the height, scale and mass of part of the proposals.'
The move has angered local Conservative and Liberal Democrat groups which believe the development will turn the 'quaint low-rise cul de sac' into a concrete jungle.
Lib Dem Councillor Lisa Rajan said: 'It is completely unacceptable that the Labour government is once again ignoring the wishes of local residents and locally elected members and imposing development on us.'