Tower Hamlets Council is taking legal action against the government claiming a controversial housing scheme was approved to save developers up to £50million.

It has started the process of challenging housing secretary Robert Jenrick’s decision to use his ministerial powers to approve more than 1,500 homes on the former Westferry Printworks site on the Isle of Dogs.

The development was rejected by Tower Hamlets last year for being too dense and, following a public inquiry held in August 2019, the planning inspector agreed with the council’s reasons for refusal.

However the Secretary of State called in the decision and granted permission for Westferry Developments to go ahead with the scheme.

The green light was given just 24 hours before the council increased the financial penalties it asks developers to pay for infrastructure, saving Westferry Developments between £30 and £50million.

A council spokesman said: “The process the Secretary of State followed in determining his appeal was influenced by a desire to help the developer to avoid a financial liability, notably the council’s revised Community Infrastructure Levy (CIL) charges. It has asked the court to order the disclosure of documents that it believes will show this was part of his consideration.

“The council is seeking leave to legally challenge the decision on the ground that it was biased and favoured the developer.”

Developers are obliged to pay CIL to help fund the delivery of infrastructure projects needed to absorb the impact of growth.

Westferry Developments already had consent for 722-homes, to be delivered in four towers of up to 30 storeys after then-mayor Boris Johnson used his powers to approve the scheme in 2016.

New plans for the site, owned by former Daily Express and Daily Star proprietor Richard Desmond, which doubled its size were submitted in 2018 adding an extra tower and seeking to deliver 1,540 new homes as well as restaurants, bars and commercial space.

John Biggs, Mayor of Tower Hamlets, said: “It is disappointing that we find ourselves in this position. In granting this appeal, the Secretary of State went against the recommendations reached by a planning inspector after a lengthy public inquiry.

“We have concerns about the way he reached his decision and I hope the courts will now look closely at the circumstances.”

The leader of the Conservative group on Tower Hamlets council also resigned from the party in part over Mr Jenrick’s decision to approve the development.

Andrew Wood, one of only two Tory councillors in the borough, said: “That decision was so shocking I knew immediately that I had to resign.”

A government spokesman said the minister outlined his reasons for approving the development in a letter in January. Mr Jenrick said in the letter that although he accepted some of the planning inspectorate’s reasons for refusal, he believed that the housing and employment benefits from the scheme outweighed any potential harm.