A family-run green grocers which has been at the heart of Hampstead life for half a century has been saved from closure after Camden Council climbed down from a �5,700 rent rise.

Town hall bosses last year claimed its offer of �31,000 a year rent for the Heath Street property was in line with the market rent, sparking fury from celebrity customers. Actor Tom Conti blasted the proposed rent rise as “criminal”.

Owners of Pure Fruit said the rent hike would cripple their business and they would be force to shut up shop.

After months of campaigning, the council and the fruitsellers have struck a deal which will see rent rise by just �300 to �25,000 a year.

Employment lawyer Jessica Learmond-Criqui, who helped the green grocer’s at the negotiating table, said: “It’s a landmark result in Camden, but it’s also because the council is listening and being as creative and flexible as they can be in the circumstances.”

Alan Mckeown, who owns cycle shop Vita in Heath Street which is also owned by the council, was baffled by the council’s behaviour over the issue and said he would be pushing for better deal when his rent review came up.

Mr Mckeown, whose shop specialises in electric bikes, said: “We’re in a perfect financial storm and the council insists on upward-only rent reviews. It’s just madness.

“Next time my rent comes up for review I will definitely be arguing the case like Pure Fruit and I might even ask to backdate my rent.”

Finance boss Cllr Theo Blackwell denied that the council had made a U-turn over its rent policy following criticism of the rent rises.

He said: “It is not a change in policy, it is just a product of negotiation with Pure Fruit.

“It is something we said all along that we were always open to talking about and we have come to a good settlement.”

In a letter to the Ham&High, thanking the newspaper for its help in saving the shop, owner Deana Camera said: “My father, Brian Lay, has kept this business going over the past 32 years, working seven days a week to make this business work.

“I will work hard to continue to trade and, with the support and custom of the community, I am hopeful that the business will thrive and continue to be able to pay its way.”