Applicant Leopard Guernsey Anchor Propco Ltd had appealed against the decision of the Greater London Authority (GLA) to refuse its plans for the mixed-use Charlton Riverside scheme on an industrial estate in Charlton in the Royal Borough of Greenwich.
The application sought consent for the demolition of existing buildings and the erection of 11 buildings ranging from two to 10 storeys in height.
These would have comprised a mix of residential, business, community and leisure uses, including 771 homes.
According to the inspector's report, the council had resolved to refuse the scheme but had referred it to the GLA. The mayor of London subsequently refused the application, against a recommendation for approval from GLA planners.
The report noted that the applicant was proposing a 40 per cent affordable housing level, subject to a grant, and had also committed to both early and late stage review mechanisms so that any additional growth in value could provide further additional housing up to 50 per cent - as sought by local planning policy.
The inspector said that "the offer of 771 units with a relatively high proportion of affordable housing could easily be considered as overwhelmingly beneficial".
However, he added that "such an approach must consider the quality of the development proposed and [the] effect that it would have on the area both now and into the future".
In this context, the inspector said that he had concluded that the proposal "fails to take the opportunity to promote a high quality of design, particularly in relation to scale and massing, that responds to its location and establishes a benchmark that accords with the design aspirations and guidance" set out in a local supplementary planning document.
The inspector said this would have "consequential conflict" with a range of policies in the council's core strategy, the London Plan and draft London Plan.
The inspector gave "substantial weight" to this harm.
A decision letter issued on behalf of the housing secretary Robert Jenrick said that he agreed with the inspector's conclusions.
Although giving, "significant weight" to the provision of affordable housing, the minister concluded that the proposal would "result in harm to the character and appearance of the area both now and in terms of future aspirations".
Jenrick found that the scheme "does not represent a high standard of design nor does it take the opportunity to promote the cohesive community and neighbourhoods envisaged, with areas of public and private space undermined by the scale and massing of the built form".