A piece of Preston history will be turned into family homes, it has emerged.
Town Hall chiefs are powerless to stop multi-millionaire businessman Yousuf Bhailok transforming Harris Knowledge Park into 11 homes for his family.
Preston Council planners originally refused planning permission for work on the Garstang Road site in Fulwood, citing an "oversupply of housing" in the city as the reason.
But the lifting of a moratorium restricting house building, central to the case for rejecting the scheme, means the council would be unable to defend its position in front on an independent inspector.
A new housing strategy, published in September, said 507 homes need to be built in Preston every year, rather than the previous target of 180.
The future of the Grade II-listed former orphanage was discussed behind closed doors at Preston Town Hall on Monday.
Coun Stuart Greenhalgh, chairman of the planning committee, said: "We had no option but to withdraw our reasons for refusal of this particular planning application.
"Previously we had to be very careful about allowing new housing developments because Preston had already achieved its housing allocation as set out in the planning policy for the North West.
"However, that guidance has now changed, with the rules on new housing developments being relaxed. Given this major change in planning policy, it would have been unreasonable for the council to maintain its stance for refusal so we have agreed not to defend the case at the public inquiry."
Today, Mr Bhailok said he was pleased to hear that "common sense had prevailed" and said he could still not see the merits of the council's earlier refusal.
He said: "It is now nearly two years since I held my first meeting with planning officers on this matter and they have been supportive all along.
"The delay has cost us considerably and the ensuing media coverage has exposed the sensitivities of some of our locals, but we are pleased.
"I feel there is a real change in the air these days and, as they say, all's well that ends well. Let me once again reassure all that we are custodians of this site and, as Prestonians of some 50 years, we are truly proud to be part of its heritage.
"We Bhailoks love this city, so have no worries."
A planning inspector will make the final decision on what happens to the eight offices and three buildings earmarked for change.
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