Consul General, Madame Zhang Meifang, wants to erect a three-metre high boundary wall and security huts around the consulate, which is in a listed building within the Adelaide Park Conservation Area, where all the trees are also protected.
In response to public complaints, a planning enforcement officer visited the site in February and witnessed a block work perimeter wall being erected.
The consulate applied for planning permission but, after a face-off developed with the council, the application was withdrawn. The council says the wall will have a "detrimental impact on the historic buildings and surrounding conservation area", while foundation works will sever tree buttress roots, making them unstable.
Work stopped voluntarily for a while but, after negotiations broke down, the council says work on the site recommenced. Despite having no planning consent, the consulate was alleged to have carried on digging a trench around the compound, filling it with concrete.
An emergency tree preservation order was issued, as well as a listed building enforcement notice and a stop notice, requiring that the works cease immediately. But the council says a construction lorry has since been spotted delivering concrete and workmen to the site, which has been boarded off from view.
The council's response was to launch proceedings, seeking a High Court injunction against Zhang. But, in a decision given on June 26 which has only just been published, Mr Justice McBride ruled that his hands are tied by state and diplomatic immunity.
The People's Republic of China is, he ruled, the owner of the consulate and the court simply has no power to issue an injunction against a sovereign state. Meanwhile, Zhang was herself "inviolate" from legal action because she was pursuing the construction project in her official, diplomatic, capacity.
Council lawyers argued that it was "self-evident that breaking the law was not a consular function".
But the judge accepted that the wall was being built "for the security, prosperity and well-being of the Chinese government".
He added: "The acts being carried out at the premises are acts carried out by Madame Zhang on behalf of the Chinese state for security purposes.
"It is not a private activity... rather she is commissioning the works in her official capacity as consul general by or on behalf of the Chinese state."
The judge said that, even if an injunction were granted, it would not be enforceable either against the People's Republic or Madame Zhang. Both she and the consulate are inviolable under the Vienna Convention and ordering them to comply with planning rules would just be "beating the air."
No one would be able to enter the consulate to enforce the injunction and, even if she breached it, Madame Zhang "cannot be arrested and brought before the Court," the judge said, while conceding the council had "at least an arguable case" that the consulate was unlawfully breaching planning control.
But, whilst the impasse with the council continued, it was "highly unlikely" that Zhang or the People's Republic would agree to waive immunity, he added.
The consulate had been warned in a letter from the council's lawyers in February that "there will likely be consequences" if it failed to respect planning rules.
And the judge said the "nuclear option" was that the foreign secretary would withdraw the premises' consular status and "terminate" China's right to occupy them.
He added: "That would be a very serious consequence. Therefore, it is my view that it is all the more important at this stage for Madame Zhang to engage in discussions with the council so that those serious consequences do not occur."
With her immunity now fully recognised, the judge hoped that she would stop the works voluntarily whilst the consulate re-applied for planning permission.