Plans for a new secondary school and 200 homes at the Southwark Fire Station site have hit a snag after developers said that the £54 million sale price means that they can't provide any affordable housing.
The deal was conditional on planning permission for redevelopment being obtained by 29 October this year.
Mayor of London Sadiq Khan has now confirmed a new long-stop date of 31 March 2018 for completion of the land sale whilst a tussle between the developers, Southwark Council and City Hall over the provision of affordable housing is resolved.
With the London Fire & Emergency Planning Authority expecting a £54 million capital receipt for the Southwark Bridge Road site, developer Hadston claims that it cannot viably provide any affordable housing as well as giving space to the secondary school.
Speaking at a debate this week, Southwark council leader Peter John claimed that Hadston "paid too much for that site" and that the council's own viability advisors say that the development should be capable of meeting the borough's policy of at least 35 per cent affordable housing.
Cllr John said that the council is having an "ongoing conversation" with City Hall about how to ensure that the school goes ahead whilst the borough doesn't lose out on much-needed affordable housing.
The Haberdashers' Aske's Borough Academy – a coeducational state secondary school – was set to open in September 2019 as part of a development of 205 homes.
A report on school place planning for last month's Southwark cabinet meeting warned that "planning or construction delays could potentially push [the school's opening] back to September 2020 or later".
• For details of the planning application see 17/AP/0367
• Update on 15 November: An earlier version of this article suggested that Hadston was paying less than the market rate for the site due to the inclusion of a school in the development. In fact the company increased its offer to match the highest bidder for the site who was not proposing a school. We are happy to set the record straight.