Southwark's ruling executive has agreed to sign a cooperation agreement with Berkeley Homes to bring forward a new development at Potters Fields.
A special meeting of Southwark's ruling Lib Dem-Tory executive on Wednesday morning agreed in principle to sign a cooperation agreement with Berkeley Homes, ending several years of stalemate between the council and the property developer.
In 2006 Berkeley Homes obtained planning permission on appeal for a development of eight cylindrical towers designed by Ian Ritchie. Only part of the land is owned by Berkeley Homes with the remainder in the hands of Southwark Council who refused to sell their portion of the land.
Last year Berkeley began works on its part of the land with a view to implementing part of the development, but the overall future of the site remained shrouded in uncertainty with Mayor of London Ken Livingstone threatening a compulsory purchase order if a resolution to the impasse wasn't reached.
Both parties will now work together to produce a jointly agreed proposal for a new development on the former coach park at Potters Fields next to Tower Bridge.
The final details of the cooperation agreement are still to be agreed and it is due to be signed on Monday 31 March.
The agreement is the first step in a process that will see a new design produced which the council says will take best advantage of the site and complement the nearby Tower of London.
"At Potters Fields we want to see affordable homes and a world-class design that is sympathetic to this unique setting while delivering best value for the people of Southwark," says Cllr Nick Stanton, leader of Southwark Council.
"This agreement is the best way to deliver these aims while ensuring the views of local residents are taken into account as new plans are drawn up.
"Both parties have set aside any past differences and agreed that the best solution for Potters Fields is for us to work together to produce a proposal for an iconic development.
"We have always said the best outcome for Potters Fields would be achieved through negotiation and we are confident we can deliver this by working in partnership with Berkeley Homes."
Berkeley Homes managing director Tony Pidgley says: "We are very pleased Southwark Council has agreed to sign a cooperation agreement with us and we look forward to working closely with the council in a spirit of mutual co-operation to deliver its vision for Potters Fields, which will provide much needed housing in this area of London."
The council's latest statement makes no mention of any cultural use for the land at Potters Fields, although the Southwark Liberal Democrat manifesto at the local elections in 2006 included a pledge to lead "the development of the vacant site between Potters Fields Park and Tower Bridge to include a nationally and internationally-recognised centre for arts and culture".
It is also unclear what implications the new-found spirit of co-operation between Berkeley Homes and the local authority will have for the future of the adjacent former St Olave's Grammar School where a public inquiry is due to be held into the developer's plans for a boutique hotel.