The Royal Borough of Kensington and Chelsea’s draft basements planning policy has been found sound by inspector David Vickery.
According to the council, the policy includes "strict guidelines" to set limits on the scale of such developments, restricting most of them to a single storey.
The move has been prompted by a steep rise in the number of large basement excavations in recent years that has caused widespread complaints by residents, the authority said.
The policy, which was examined in September as a partial review of the borough’s core strategy, proposes:
A restriction to a single storey in most cases, with exceptions for large sites
A reduction in the maximum extent basements can extend under a garden, from 85 per cent to 50 per cent
An outright ban on basements under listed buildings
A requirement for construction traffic management plans to be submitted alongside planning applications to help limit disturbance during construction.
In his report, Vickery said the number of basement planning applications received by the council has shot up from just 46 in 2001, to 182 in 2010 and 450 last year.
Vikery wrote: "I am satisfied that the council has identified deep concerns amongst its local residents about alleged adverse impacts on living conditions from noise, vibration, dirt, and dust from construction and from associated traffic, in addition to concerns about impacts on drainage, on appearance and landscape, on structural stability, and on historic buildings."
Vickery concluded that there were "good and compelling justifications for a positive, planned approach for basement developments in the borough".
In a statement, the authority said the decision marked the "end of mega-basements in Kensington and Chelsea", adding that "two and three storey basements [were] not uncommon".
Tim Coleridge, cabinet member for planning policy, said: "Basements have been the single greatest planning concern our residents have expressed to us in living memory."
The councils started work on the policy two years ago, according to Coleridge, who said that basement developers "have aggressively opposed us every step of the way".
In 2012, Planning revealed that the council was considering a review of its basements planning guidance.
The new guidelines have to be approved by full council on 21 January before they can be formally adopted.