Camden planners have warned they are powerless to stop the latest plans to demolish historic Athlone House.

A government planning inspector last year ruled the “damaged, unlisted building” made a limited contribution to the Heathside conservation area - and in principle - a high quality modern replacement could be a more attractive option.

Inspector Paul Jackson added that the long unoccupied Victorian mansion had fallen into such disrepair any owner would be unlikely to find it worthwhile to fund the estimated �14-�21million to refurbish a property.

Cllr Valerie Leach, cabinet member for planning, said these findings made it tough for the council to fight fresh plans by Athlone House Ltd to replace the 1870 house with an eight bedroom home including spa, cinema and ballroom.

She said: “The council has fought to preserve the existing buildings at Athlone House for many years.

“Unfortunately, due to a recent appeal decision from the Planning Inspectorate a commitment that the existing building will be refurbished has been removed.

“The council therefore may not be able to refuse a future planning proposal to demolish and replace Athlone House, if the application met the criteria set out by the planning inspector.”

But campaigners, who have fought for more than a decade to see off proposals to bulldoze the Highgate landmark, are furious that a seven-year-old section 106 agreement for developers to restore and refurbish the house, in return for building 22 luxury flats on the site, was never enforced by the council.

Michael Hammerson, of the Highgate Society said: “We believe the developer which built the flats has a responsibility to restore the house. Camden Council should also have made sure the section 106 was enforced. This is something that the government needs to be aware of. It is an evasion of the planning procedure.”

Mr Jackson’s report however states that the refurbishment agreement was not watertight.

“There was nothing in the agreement to prevent the new apartments…being completed and occupied without completing the refurbishment of Athlone House, and nothing to prevent sale of part of the site… or submission of a new planning application..”

While the decision upheld the council’s refusal of plans for an �80million faux classical mansion on the site because it was too large, it has paved the way for the current proposals to be approved.

A residential property for 70 years, Athlone House served as an RAF intelligence base and later an NHS hospital and old people’s home before it was sold in 2000.

It changed hands once again in 2005 when a mystery owner, thought to be a foreign billionaire, bought it and lodged plans to replace it.