A major development of new offices and homes between York Road and Waterloo Station has been approved by Lambeth Council's planning applications committee.
The scheme for the redevelopment of the 1960s Elizabeth House block has been designed by David Chipperfield Architects.
The site was purchased by Chelsfield together with London and Regional Properties after P&O's earlier scheme for the site was rejected in 2009 by the former communities secretary John Denham.
The latest scheme includes two new buildings – 11 storeys and up to 29 storeys – which will include new office accommodation, 142 homes and retail space.
Lambeth's planning applications committee approved the scheme by four votes to two on Tuesday night.
"The design of the building is bold and ... will give rise to a 'Marmite' reaction," warned Andy Gutherson, Lambeth's interim head of planning.
He said that the proposed building, which would accommodate up to 8,600 office workers, "announces the role of Waterloo as a public transport interchange".
Mr Gutherson explained that the scheme will include a small element of affordable housing. "This will involve 12 intermediate units on-site and 16 rental units off-site but immediately adjacent at Leake Street, thereby delivering a mix of tenure types and ensuring the element of affordable housing within the scheme is maximised," he said.
Architect Sir David Chipperfield told councillors that the scheme's design has been influenced by the technical constraints of building above a number of underground railway tunnels, as well as answering the critics of the previous scheme who complained of its impact on views from the Westminster world heritage site.
"In terms of the skyline, the building form reflects many of the anxieties about the viewing corridors that we must respect," he said.
Network Rail's head of town planning Tom Higginson urged the committee to approve the scheme. "Key benefits include the new pedestrian environment surrounding both Waterloo Station and the Waterloo International Terminal (WIT) with the construction of the Victory Arch and Central Squares increasing both the visibility and pedestrian permeability and connectivity," he said.
"The provision of new escalators, lifts and stairs within the WIT orchestra pit is particularly commendable both to aid passenger flows but also to bring back into use part of a significant redundant structure.
"Network Rail shares the vision of the London Borough of Lambeth of what the regeneration of the wider Waterloo area can bring, both in terms of jobs and houses and investment in infrastructure."
John Rushton, chairman of the Waterloo Quarter BID, also spoke in favour of the proposed development on the grounds that it would help to bring the number of employees working in the Waterloo area back up to 1980s levels when thousands of people were employed by the Greater London Council and Inner London Education Authority at County Hall.
"At present, Lower Marsh is on its knees," said Mr Rushton. "15 per cent of the shop units are empty. Now there's an opportunity to address that with a working population that's estimated to have an annual spend of £12 million – and that's just at lunchtime."
He added: "This new Elizabeth House will give something that we badly need – and that's footfall."
Stuart Balfour, owner of the Red Bus shop in York Road, complained that the proposals would reduce the number of shops along the street.
He said: "We're going to end up with another building like the Shell Centre with two security guards outside asking people to 'Move along please, there's nothing for you here, please go'.
"I think the shops should remain. They've been there for centuries in one form or another.
"Not everyone in Lambeth can work in high-tech offices. Shopkeepers and shop staff are just as important.
"I think we should be given the chance to have on-street shops – not hidden away in foyers.
Bishop's ward councillor Diana Braithwaite warned that "the community has been short-changed" by the scheme.
"Most of the benefits do centre around the public realm, which benefits the developer itself, not the wider community," she said.
On affordable housing, she said: "This housing is desperately expensive and it doesn't represent value for money."
She added: "People in my ward will not be able to live in these places."
Committee chair Diana Morris said: "We'd all have liked there to be more [affordable housing] but we have to accept the policy framework that dictates what is acceptable."
Cllr Brian Palmer said that Sir David Chipperfield's design was an improvement over the "pretty ghastly" Allies and Morrison scheme the committee had previously considered, but he feared that the new architects had been too "timid" in their approach.
"I don't think for such an important site this is as well articulated a development as it could be," he said.
Cllr Steve Bradley was even less impressed. "I wouldn't be surprised if this structure in a number of years joins the famous Cumbernauld car park [sic] and the office block in Colliers Wood on the list of architecture that the public really doesn't like," he said.
"It looks like a robot that's standing over Waterloo Station, Victory Arch and Victory Square."
Committee vice-chair Cllr Ruth Ling disagreed. "It's subservient to Victory Arch and allows Victory Arch to take centre-stage, as perhaps it should," she said.
Cllr Ling also welcomed the disappearance of the "pretty grotty shops" along York Road.
She added: "Lambeth has attracted some world-class architects in recent years ... I think Sir David's contribution is a worthy one to add to that legacy."