An environmental campaign group has questioned why Network Rail appears to have given up valuable land rights, as part of a controversial planning application for an 18-storey tower block in the heart of Dalston.

Developer, Rothas Ltd, wants to bulldoze the Peacocks store in Kingsland High Street, and build two blocks rising more than 50 metres into the sky, containing 130 luxury flats.

Hackney Council’s planning officers have recommended the development gets the green light.

Planning application drawings show windows from the first floor upwards in the north face of the massive tower, directly overlooking the one storey Dalston Kingsland Overground Station next door.

Bill Parry-Davies, the founder of campaign group OPEN Dalston has queried whether there is an agreement in place with public body Network Rail which owns the station, to allow Rothas Ltd to build on the boundary line.

He pointed out that by being able to place windows here, the developer maximises the number of rooms and so the value of its site, but at the same time precludes Network Rail from any future development into the station’s air space.

“If there is no such agreement, then it seems to me the viability of the proposed development is at risk in the future, because at some point the windows in the north boundary wall may be obscured by later neighbouring development on the railway land,” he said.

“If Network Rail applied for planning permission build up the station it would put a Planning Committee in an impossible position,” he said.

Rothas Ltd dropped plans for affordable homes for Hackney’s less wealthy residents, despite the council’s planning policy stating new developments should provide 50 per cent affordable housing.

Instead they say they will undertake �1.7million improvements to the Overground Station.

Normally a scheme of this scale would provide both affordable housing as well as a benefit to the community through a section 106 agreement.

But Mr Parry-Davies believes it could possible for Network Rail to fund the station upgrade itself.

“If they just built three more storeys on top of the station they could sell the flats and pay for the upgrade, why do we need an 18 storey tower block to pay for it?” he asked.

Chris Costelloe, conservation adviser for the Victorian Society, echoed his comments.

“This is a tragic missed opportunity for Dalston, designing this tower in isolation is wasteful and short-sighted,” he said.

“The Society would like to see the re-design of this building integrated with the rebuilding of the station.’

A spokeswoman for Network Rail said there had been no agreement made with Rothas Ltd, but that it had no plans presently to develop the station and was not going to oppose the application.

“The plans that have been put forward, if approved by the council, would deliver significant benefits for people in the local area through the proposed upgrade of the station,” she added.

In a statement from PR company, Four Communications, Chris Shaw, on behalf of Rothas Ltd said Hackney Council applied for funding to develop the station from the Department of Transport last year, but was turned down.

A decision whether to award planning permission is due to be taken the town hall’s planning sub-committee tonight.