The plan to build a massive development of flats at Dover’s Corner in Rainham has been abandoned by the developer.

After a five year battle between residents and Havering Council opposed to the scheme on one side, and developers Western Homes on the other, it appeared the 750 new flats would be built.

The government approved the plans for the scheme in January.

But this week Bob Weston, the chairman of the group, wrote to the Recorder stating the scheme is to be abandoned due to the government cutting funding for affordable housing.

He wrote: “Dover’s Corner would have provided over 750 new homes, 25 per cent of which would have been affordable.

“The irony is that the communities’ secretary Eric Pickles actually gave the scheme consent, primarily due to the severe shortage of such key housing.

“But by cutting funding which enables social landlords to pay for the affordable homes private developers are willing to build, which are sold to them way below market vale as it is, the government has prevented 750 families from finding a new home.”

He said 200 of the flats would have been for affordable housing.

Mr Weston has called for the government to remove “excessive red tape and taxation” and make the planning system fairer for poorer households.

Dagenham and Rainham MP Jon Cruddas said: “I am not at all surprised as house building starts are now at record lows, and government cutbacks have reduced incentives.

“(But) I have to say that every single Rainham resident will welcome this. The local area could not have handled the extra pressures on school places, the NHS, transport infrastructure and police.

“I am absolutely delighted about this decision to abandon the plans.

“I would like to take this opportunity to congratulate every local resident who has campaigned against this development. Their protests have not been in vain. It is a good day for the south of Havering.”

And Havering Council leader, Cllr Michael White, said: “We have always opposed this scheme on the grounds that it would be an eyesore next to a conservation area and was totally against our planning policies that aim to protect Rainham from overdevelopment.

“While we welcome more funding for affordable housing in our borough, it is important that new developments should be in line with our planning policies and in keeping with the character of the area.”

The government has said it is planning to simplify the planning process to remove obstacles for developers.