Liverpool Council was knocked back in its attempts to place enforcement measures on the highly controversial Fox Street Village scheme, after the Government's planning inspectorate quashed its notice.
In March, the authority sent out enforcement notices over the whole intended 400-apartment scheme in Everton , which faces out onto Fox Street, raising fears that the development is "poorly finished", and fails to meet standards, BusinessLive reports .
The notice demanded that the developer either demolish four of the blocks, or build basement car parking and comply with dozens of measures including detailing how health risks and other concerns are to be remedied - some within a week of the enforcement notice becoming effective.
But Dr Michael Steiner of Fox Street Village Investors Association appealed against the notice, citing national planning legislation on the grounds that the period given to remedy the failings fell short of "what should reasonably be allowed".
Quashing the enforcement notice, planning inspector AA Phillips said the council did not specify with "sufficient clarity" the alleged breach of planning control relating to the development's Block A.
The document said the council's error was that the allegation should have been one of development without planning permission - and a breach of condition, instead of a breach of planning control.
He also said there were a number of errors in the notice and that it did not in places specify the conditions that had been breached - although that those could "be corrected without causing injustice to parties".
A spokesman for the council put the ruling down to a "technicality" - and said the authority still hopes to take action against the failed block.
He said: “Although the ruling by the planning inspector on the Fox Street Enforcement Notice looks disappointing at first glance, the reality is that the verdict was based on a technicality regarding the usage of block A.
"Now that the usage of block A has been determined the city council will now take legal advice, with a view to taking further action.”
The news prompted an angry response from Richard Kemp, leader of the Liberal Democrats on Liverpool Council, who has written to the authority to ask chief executive Tony Reeves to "intervene personally" in the situation.
He said he found it "absolutely unbelievable" at the council's alleged failure to demonstrate important aspects of the case during the appeal process, adding: "Either the council is at fault in the way that it prepared its case or the planning inspectorate is at fault for the way that they listened to it.
"The council must act or Liverpool become an open target for developers who want to shirk their planning obligations to both potential building users and the community in which they are set."
Fox Street Village Ltd (FSVL) went into administration in July and was revealed in August to owe its creditors around £10m .
Before that, in May, parts of the development were hit with a council prohibition order due to fire safety fears, with hundreds of students forced to move out.
Most recently, it was fined thousands of pounds for what a judge described as a "disgraceful" breach of planning conditions.
Since then, Fox Street Village Investors Association has been set up to represent the interests of the investors, who are based all around the world.
It was set up to intervene to "protect their interests", carrying out "remedial work" to comply with the notices, and Liverpool Student Lettings said it is acting on behalf of the association .
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