London's Smithfield Market will not be redeveloped after Whitehall ruled against a plans to renovate the Farringdon landmark.
Property Investor TIAA Henderson had wanted to turn the run-down Victorian market into a collection of shops and eateries - as well as an office block - at a cost of £160m.
Instead, the proposal was turned down by Eric Pickles, the secretary of state for communities and local government, despite receiving backing from the Mayor of London.
Nick Boles, minister for planning, said that the pros of the scheme "were not enough to outweigh the potential harm to an area of such historic value".
The move to block the development has come as something of a surprise after the scheme won the backing of Boris Johnson, English Heritage and the City of London Corporation's planning department.
In its decision, the Department for Communities and Local Government called the Western Market buildings "an integral part of the group of market buildings that is a key characteristic of the Smithfield Conservation Area" and that it found "the proposal to demolish important parts of significant market buildings, to the great detriment to the surrounding area, to be wholly unacceptable".