The controversial Doon Street Tower on the South Bank has been given the green light by communities secretary Hazel Blears, even though a planning inspector recommended refusal of the application.
The secretary of state has praised the "technical virtuosity, imagination and keen attention to detail" in the design by Lifschutz Davidson Sandilands for Coin Street Community Builders.
The mixed-use scheme would include an 8-lane 25-metre public swimming pool and learner pool, a 120-piece gymnasium, two aerobics studios and a 4-court multi-purpose sports hall.
These facilities would be part-funded by the sale of 329 private apartments in the tower.
A public inquiry under inspector Philip Wilson sat at Lambeth Town Hall in February and March.
The main issues at the inquiry were the impact of the tower on views from the bridge in St James's Park and its impact on the setting of Somerset House.
There was also controversy over the omission of any affordable housing from the scheme – even though the developer – Coin Street Community Builders – is principally known for its social housing.
Crucially, the minister has ruled that the South Bank site is appropriate for skyscrapers: "The Secretary of State agrees with the Inspector ... that there is planning policy and guidance support for a tall building on the application site and that the acceptability of any such proposals would depend on the quality of its design, its effect on local and strategic views, its contribution to London's skyline and its relationship with other buildings and spaces."
Ms Blears concludes that "... the settings of the Royal Festival Hall and the Royal National Theatre would be preserved, and that there would be no unacceptable impact on the view from St James's Park Footbridge".
In terms of the visibility of the tower from the upper terrace of Somerset House: "... while she considers the harm is significant, she disagrees with the Inspector ... that it is sufficiently great to justify, by itself, withholding planning permission".
As regards the omission of affordable housing – normally required in such developments – the minister concludes that "... the scheme's housing element would contribute significantly towards meeting a need for additional housing in Lambeth, albeit wholly within the private sector. She gives substantial weight to the housing benefits of the application".
According to the decision letter issued by her department, Ms Blears considers that "the benefits of the scheme to the local community are substantial".
"The scheme is not just about radically improving the environment of the South Bank but also delivering vital facilities which offer alternatives to those at risk of obesity, gang culture and unemployment," says Iain Tuckett, group director of Coin Street Community Builders.
"In place of a car park we will have London's best public swimming and indoor leisure centre, the headquarters of Rambert Dance Company with its 3 dance studios, 329 new homes, a town square linked to Waterloo Bridge, possibly a new university faculty building and, across one road the National Theatre, and across the other award-winning housing co-operatives. This is community building with style!"
The decision sets an interesting precedent for the forthcoming inquiry into two tall building proposals for the Blackfriars Road area, due to open on 9 September.
• 3pm update: English Heritage reacts to Hazel Blears' decision