Lambeth Council has said it is minded to grant planning consent for a £1bn scheme at London’s Waterloo station.

Last night its planning committee approved plans by P&O Estates and Morgan Stanley Real Estate to redevelop Elizabeth House by a narrow vote of three to two.

Elizabeth House is a dilapidated building that runs alongside the station on York Road. P&O Estates plans a 1.4m sq ft scheme, designed by Allies & Morrison .

The office element totals 845,000 sq ft in two office blocks of 28 and 22 storeys while 280 flats will be developed in a 33-storey building.

The council pressed ahead, despite a strong objection from the Mayor’s office, but said the application would be referred to the Government Office for London.

Mayor Boris Johnson now has 14 days to decide whether to direct Lambeth Council to refuse planning consent.

In a letter to the council Johnson said: ‘Having considered the report, the Mayor has concluded that the proposal is unacceptable in strategic planning terms due to the impact of the proposal on the setting of the Westminster World Heritage Site; the view from the footbridge in St. James's Park, and the setting of County Hall and the Royal Festival Hall from various view points.’

David Hudson, a director at P&O Estates, said: ‘We are looking forward to meeting Sir Simon Milton and other colleagues from City Hall in the very near future and working with the Mayor’s team to resolve issues and bring forward this crucial phase of the regeneration of the South Bank.

‘We have invested heavily in the regeneration proposals encouraged by the apparent certainty offered in the London Plan and will need to progress rapidly with the GLA, Lambeth and South Bank colleagues.’