campaigners are celebrating victory after an 11-year battle to save an historic Highgate landmark on the edge of Hampstead Heath from being demolished by super-rich developers.

A foreign billionaire’s controversial bid to bulldoze Athlone House was rejected by a government planning inspector last Thursday.

The anonymous property owner is widely believed to be Kuwaiti businessman Nasser Al-Kharafi, who ranked among the 50 richest people across the globe.

But in another unexpected twist it emerged this week that Mr Al-Kharafi died of a heart attack in Egypt just four days before the inspector’s decision, plunging the future of Athlone House into further doubt.

Unaware of his death, Hampstead and Highgate residents, who fought doggedly to save the much-loved mansion, built in 1870, were celebrating. Michael Hammerson, a member of the specially formed Athlone House working group, said: “After 11 years of struggling to keep Athlone House we’re extremely pleased. It’s taken up an enormous amount of effort for the working group and others.

“It certainly shows the importance of local people keeping up this fight against what could be regarded as overwhelming opposition.”

Fellow campaigner Jeremy Wright, from the Heath and Hampstead Society, added: “We’re delighted the inspector refused the application. There were more than 500 objection letters when it was submitted, which shows the strength of feeling against it.”

The fight to protect Athlone House dates back to 2000 when the former hospital and RAF intelligence base was bought by a developer.

This owner, who went under the name of Athlone House Ltd, was given permission in 2004 by Camden Council to build seven luxury flats on the mansion’s grounds on the proviso the crumbling building was restored.

In 2005 the property was sold again to another buyer, who is thought to be Mr Al-Kharafi. But rather than renovate the house as agreed, he proposed to replace it with what was billed as the world’s most expensive home.

In an �80million scheme he planned to create a neo-classical eight-bedroom pile, complete with an entertainment centre, staff quarters and underground car park.

The design for this ‘dream home’ was drawn up by one of Prince Charles’s favourite architects, Professor Robert Adam.

Property experts speculated that once completed, the house would be worth in the region of �130million making it the most costly private dwelling in the world.

But proposals to demolish Athlone House attracted huge local opposition, with one objector branding its replacement “a cross between a Stalinist palace and a Victorian lunatic asylum”.

And last year Camden Council sided with protesters when it refused the plans, prompting the owner to launch an appeal to overturn this ruling.

However, this challenge was dealt a crushing blow last week when it was dismissed by a government planning inspector, following a 12-day inquiry.

Prof Adam said the appeal had been turned down on a “technicality” relating to the size of the new building, rather than the quality of his architecture.

He also confirmed that a fresh appeal would be “highly unlikely”.