Concerns have been raised that the proposed 02 Centre development between Finchley Road and West Hampstead will cause flooding for residents beyond the site.
Developer Landsec claims runoff would be reduced when works are complete, but Thames Water has raised worries about the impact on infrastructure.
Water rushed through homes in South Hampstead during two days of heavy rainfall in July 2021.
Thames Water said in its response to the planning application that following initial investigations, it "identified an inability of the existing surface water network infrastructure to accommodate the needs of this development proposal".
"With regards to surface water the proposed rate is far too high for the size of the site and does not come close to achieving greenfield runoff rates, it was agreed with Thames Water that there would be a surface water discharge of 36.4 litres per second and therefore this should be achieved," it wrote.
Thames Water said sewers run directly from the 02 site down to the South Hampstead area.
Joan Munro, of the South Hampstead Flood Action Group SHFAG), called for community infrastructure levy (CIL) funds from the development to be shared with neighbouring wards "given the huge potential flooding problems this development might cause for South Hampstead and the Belsize Road/Priory Road area".
A spokesperson for Landsec said it takes "flooding extremely seriously".
"The O2 site is largely made up of hard surface materials like concrete and tarmac," they said.
"As the majority of these surface are impermeable the rate of surface water runoff is higher than on a greenfield site, which therefore increases the risk of inundating to below ground sewerage system."
They said surface water storage will be added across the development to control the flow into local sewers and "a huge amount of new green infrastructure" will be added, including large new green spaces, growing spaces, rain gardens, and sunken marshy borders.
"As part of the drainage strategy significant volumes of storage will be introduced to the O2 Centre site. As both the flow rate and runoff volumes will be significantly reduced post redevelopment, this can only improve both upstream and downstream catchments outside of the planning red line boundary," they said.
Camden Council said it will consult on local CIL funds "in the autumn".
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