The council has pulled the plug on a regeneration scheme that would have provided more than 6,000 new homes for the borough.

Councillors finally voted to scrap the Haringey Development Vehicle (HDV) – a partnership with private developer Lendlease – at a cabinet meeting last night (Tuesday, July 17).

The controversial deal would have involved handing more than £2 billion-worth of public assets to the developer and the demolition of several estates, including Broadwater Farm and Northumberland Park.

But the council could be facing a protracted legal battle amid reports Lendlease is planning to challenge the decision.

The HDV sparked a fierce battle between members of Haringey Labour and led to the departure of former council leader Claire Kober.

Opponents of the deal warned that people who faced being moved out of their homes on the estates would not have a guarantee of affordable housing on the new developments.

This is despite the fact that the council promised to give people a guaranteed right of return at equivalent social rent levels.

The current Labour administration, headed by Cllr Joseph Ejiofor, was elected on a platform of opposition to the HDV.

Cllr Ejiofor said: “We are committed to building new, affordable homes over the next four years – including the delivery of 1,000 new council homes – and we start from the principle the council should be delivering those homes itself.

“We know a decision like this should not be taken lightly, in the same way that we know we have a duty to listen to all voices in our local communities.

“We are obviously concerned at the threat of protracted legal action by Lendlease. However, the people of Haringey elected us to govern their borough, and to take decisions that are in the best interests of all Haringey’s residents.

“As set out in the cabinet report, this is an informed decision which we are taking with our eyes open.”

The cabinet report admitted that a decision to ditch the regeneration plan could lead the council to miss its housebuilding targets – raising the prospect of government intervention.

It also acknowledged the borough could lose out on almost £30 million worth of investment planned by Lendlease.

The council will have to pay more than £500,000 to the developer to cover pre-development work that has already been undertaken.

Dan Labbad, chief executive officer of Lendlease Europe, said: “We’ve made every effort to work with the council to find a way forward to help solve Haringey’s housing crisis.

“At the end of the day it’s the residents of Haringey who will suffer most from this decision, given that 10,000 families remain in desperate need of a home.

“The flexible framework that the HDV offers would deliver enormous benefits in terms of homes, jobs and wider community facilities quickly to address this need.

“We are extremely disappointed the council has voted not to proceed with the HDV without even offering us the opportunity to discuss face to face, undoing four years of planning in just a matter of weeks.”