Builders finally start on £500m flats – four years after eco-battle

A legally fraught £500m luxury-flats scheme in west London is set for development after years of planning battles with angry environmental campaigners.

Hutchison Whampoa has hired Irish construction group P Elliott to start minor building work at the Lots Road site in Chelsea, which the Hong Kong conglomerate bought in 2000. Planning consent, which was unsuccessfully challenged in the courts by eco-campaigner Lady Dido Berkeley in March 2007, was due to run out next month if at least some construction work was not under way.

In the four-and-a-half years since the then deputy prime minister John Prescott approved the scheme, there has been no sign of any development other than standard remedial work. But P Elliott went on site this month, and there are a number of selection processes for additional construction companies due in the new year.

Campaigners have argued that the scheme, which converts a former power station, is in breach of the Blue Ribbon policy designed to protect the historic setting of the River Thames.

The planned scheme comprises 800 residential apartments across 13 buildings, including two riverside towers of 37 and 25 storeys, and the conversion of Lots Road power station.

Many firms, during the 2003 to 2007 property boom, bought plots of land for high-end residential development. But long planning battles and the drastic change in the economy since 2007 have meant that hundreds of schemes have not seen the light of day. Although high-end residences are still selling well in the capital, a mixture of plummeting land values and lack of development finance has meant many schemes up and down the country are on ice until demand improves.

Hutchison Whampoa also owns a number of other sites in London with development proposals, including schemes in the Docklands. It is also one of nine groups shortlisted by the Olympic Delivery Authority to buy the Olympic Village after the 2012 Games.

Another power-station site – Battersea – was given the go ahead by London Mayor Boris Johnson last Thursday. Following the decision, the application for the £5.5bn scheme will be considered by Eric Pickles, the Secretary of State for Communities and Local Government.

A Hutchison Whampoa spokesman confirmed the P Elliott appointment, and said that major development works will start next year. No date has been set for the completion of the scheme.