"An appropriate foil" for Jack Straw's Castle or homes which will "harm the rural setting and character of the Heath"?

Plans to build two houses next to Grade II-listed Jack Straw's Castle on the edge of the Heath were disputed at a public planning inquiry on Tuesday.

The proposal by Highgate-based Albany Homes to build in the old pub's car park is opposed by Camden Council, the Heath and Hampstead Society, the Hampstead Neighbourhood Forum and the City of London Corporation.

Planning inspector Hayley Butcher led the one-day hearing, and is set to rule on whether Albany should be allowed to build the two three-storey homes.

Camden Council officers previously rejected the application on the grounds it would harm the setting of Jack Straw's Castle, does not contribute to affordable housing provision, and would impact on parking availability.

At the inquiry Camden's Antonia Powell argued the plans would harm the backdrop to the listed Jack Straw's Castle.

She said: "The proposed houses would be within view and would cut off Jack Straw's Castle from the background."

Paul O'Neil from the CoLC said: "The principle concern of the City Corporation is that this will fundamentally change the relationship on the boundary of the Heath." He said the plan would "encroach" on the Heath.

Thomas Hill QC, representing Albany Homes, argued the plans would not harm the setting of Jack Straw's Castle – while witness Dr Chris Miele said he felt it would "actually enable a better appreciation" of Jack Straw's Castle.

David Altaras, representing the Heath and Hampstead Society and the Hampstead Neighbourhood Forum, said the scheme would harm the Heath. "It would result in a hard edge to the Heath at this particular location and would be contrary to planning policy."

The plans were drawn up by architect Quinlan Terry - who grew up in Hampstead and once shared a practice with Raymond Erith, who was the architect behind the rebuild Jack Straw's Castle in 1964.

Mr Terry defended his scheme saying it reflects the design of Jack Straw's Castle, along with Georgian buildings in Hampstead, and cautioned against dismissing it on design grounds.

Mr Erith's daughter, Lucy Archer, also spoke at the inquiry, saying: "I support Quinlan Terry's scheme because it would prove an appropriate foil for Jack Straw's Castle, and I am sure that Raymond Erith would have approved."