A planning application to demolish the dilapidated house of the notorious “Mole Man” tunneller, was refused by Hackney Council last week.

Andrew Fraser, who claims to be acting as administrator for Mr Lyttle’s relatives, lodged the planning application in September.

He wanted to make way for a four-storey block of eight two-bedroom flats at the corner of Mortimer Road and Stamford Road.

The consultation ended on October 25, and planning officers refused the demolition last Tuesday.

A council spokesman said: “The proposed demolition of the existing building would result in the loss of a building of local townscape merit, which is a heritage asset and makes a positive contribution to the special historic character of the De Beauvoir Conservation Area.”

Normally permission is not needed to demolish a building, but the De Beauvoir conservation area is subject to an article 4 direction, meaning any alteration to a building must be approved by the council beforehand.

Mr Fraser, the owner of probate research specialists Fraser & Fraser, which features in the BBC TV series Heirhunters, said he was “surprised” the application to demolish the building was refused.

“We aren’t necessarily arguing that the design put forward is a suitable design, that’s an issue for the future - the issue is whether to keep what’s there or not,” he said.

“It’s beyond repair so it can’t be renovated, we can’t do it with the money - the financial value of what it will be worth renovated compared to the debts which have to be paid back means it’s not in our interests to do so,” added Mr Fraser, who has the right to appeal.

Mr Lyttle died in June aged 79, owing over �400,000 to the council, who saved the building from collapse.

The eccentric oddball gained worldwide fame after he spent 40 years digging a 60-foot network of tunnels beneath his �1 million house in Mortimer Road and surrounding areas.

Before the operation to salvage Mr Lyttle’s home by pouring concrete into the tunnels, workmen had to remove skip-loads of accumulated junk, including the rusty wrecks of four Renault 4 cars, a boat, scrap metal, old baths, disused fridge freezers and old TV sets.