The Seagulls originally applied for permission to build the arena in 2001. The site is in the Sussex Downs area of outstanding natural beauty (AONB) and lies close to the proposed South Downs national park boundary.
The club has been playing its home matches at the 7,000-seat Withdean athletics stadium since 1997. Its previous home, the Goldstone Ground, was sold off in 1999. Brighton argued that it is losing out on ticket revenue by having to play its fixtures at Withdean.
An ODPM summary of Prescott's decision to approve the Falmer scheme said that the proposal is in the public interest and found no realistic alternative location. The decision letter concludes that refusal would have a negative impact on the local economy.
Brighton and Hove City Council leader Ken Bodfish commented: "We used every weapon in our armoury - donating the land, spending a great deal of time and money supporting the club through the public inquiries and ensuring that the proposals brought maximum benefits."
Local law firm DMH Stallard Planning began work on preparing the application in mid 2000. Jonathan Clay of 2-3 Gray's Inn Square, Brighton and Hove Albion's counsel, said that Prescott had balanced the needs of the club and economic development against the location of the stadium in the AONB.
"One of the major deciding factors was the ability of the club to provide good public transport links for spectators and to minimise the use of cars. The stadium immediately adjoins a train station, to which improved services can be provided, and will be easily accessible by coach and bus," explained Clay.
But Campaign to Protect Rural England planning chief Henry Oliver said: "The secretary of state has a responsibility to the nation as guardian of good planning and national policies to protect our environment. This decision is a shameful abdication of that responsibility."