Claps and cheers of victory rang around the packed town hall chamber last night, as six Hackney councillors voted unanimously to veto an 18-storey skyscraper in the heart of Dalston.

A petition signed by 1,328 opponents had been handed in against the contentious Dalston Green application in Kingsland High Street, which would have seen two blocks rising more than 50 metres into the sky where the Peacocks store now stands, to create 130 luxury flats.

Plans to build affordable homes for Hackney’s less wealthy residents had been dropped by the developer, Rothas Ltd, despite the council’s planning policy stating new developments should provide 50 per cent affordable housing.

Instead, they had offered to fund �1.7m of upgrades to the Dalton Kingsland Overground station next door.

One of five opponents speaking, Elsie Pilbeam, said: “Giving up this essential duty of provision in return for a mere �1.7m handout for lifts and frontage to the station is completely unacceptable.

“It is more or less equivalent to giving up the health of the area for a boiled sweet.

“In any case the developer should not need to be involved in providing for the station, Network Rail has already provided the same improvement at Camden and Canonbury, so why not at Dalston Kingsland, which has far heavier customer use?

“Acceptance of the developer’s money for this just means the council is putting itself in the developer’s hands, whereas the council should be working for local people,” she said to cheers of approval.

“You can be confident in refusing it, because this development is contrary to core policy,” Bill Parry-Davies, founder of environmental campaign group OPEN Dalston added.

Speaking on behalf of the developer, Rothas Ltd, Chris Shaw said the development would provide valuable residential and retail space in the town centre and would act as a catalyst for regeneration.

“The proposals are for an elegant building, sized proportionately to its key town centre location,” he said.

Summing up, Vincent Stops, chair of the planning committee, said he believed the application should be refused on the grounds that it does did not provide affordable housing, because of its bulky design and height, the loss of shop and floor space it would entail, and because it compromised future development of the railway station.