The decision by Eric Pickles Secretary of State for Communities and Local Government follows the thumbs up from Mayor of London Boris Johnson last December.

Developer Treasury Holdings said it was now planning to start work on site in 2012. But a big question mark hangs over financing as the developer faces debts and is still trying to find an investor to buy a 50% stake in the scheme for £400m.

The site has proved a graveyard for several ambitious redevelopment plans over the last two decades, all stumbling on raising funding to salvage the derelict Grade II listed power station.

Should the ambitious urban regeneration plan get off the ground, 3,200 apartments will be built alongside a huge complex of 1.7m sq ft of offices and 1.5m sq ft of shops and leisure facilities.

A further £200m has also been pledged to fund a two-station extension to the Northern Underground Line.

Rob Tincknell, managing director of Treasury Holdings, said: “We are delighted to have received final approval for the scheme and and would like to thank the local community, Wandsworth Council, the Mayor of London, and the Secretary of State for their support and valuable engagement throughout the process.

“Following productive talks with a number of potential investors, we now look forward to bringing an investment partner on board and commencing with the development of the site and the regeneration of the power station.”

Treasury Holdings’ plans for the development of the 15.38 hectares Battersea Power Station site remain at the centre of the company’s activities in London.