Developer EID was issued with prior approval at the end of September for its plans to turn Mulberry Place town hall in the London Borough of Tower Hamlets into 204 residential apartments.
Under the plans, the town hall, which is currently home to Tower Hamlets council, would be converted to 135 studio flats, 27 one-bedroom flats and 42 two-bedroom flats.
In March this year Tower Hamlets awarded itself planning permission to turn the grade II-listed former London Hospital in Whitechapel into a new civic centre.
The council is due to move to the building in 2022 when its current lease at Mulberry Place comes to an end.
Tower Hamlets has approved an Article 4 direction removing PD rights for office-to-residential conversions in the area which includes Mulberry Place but it does not come into force until June 2019.
John Biggs, elected mayor of Tower Hamlets, said: "We’ve been very critical of permitted-development rights.
"This is a failed policy as it allows applications that can be of a poor quality and lack affordable housing. I am concerned about the current proposals for Mulberry Place on this basis.
"While the application is within the policy, so officers could not refuse it, I disagree with this policy set by central government.
"It is taking power away from councils and letting down residents who are on our housing waiting list.’’