The £150m development is a key part of Sutton Council’s ambitious Hackbridge Project, which aims to create UK’s first sustainable suburb in south London.

Schroder Property Investment Management, on behalf of Hackbridge Property Unit Trust, won approval for the test-bed green neighbourhood on the Felnex Trading Estate.

The first phase of the development is set to begin in 2012 with the building of a new 4,000 sq m supermarket and a number of residential flats.

Ultimately the plan is to transform a 7.7 hectare site into a thriving town centre with 725 new homes, a community centre, doctor’s surgery, care home, supermarket, offices, shops and a bus interchange.

The buildings will surround a public square, designed to be the new heart of the community, where events such as farmers’ markets can be held and public art displayed.

Also included are open spaces, pocket parks and ‘edible gardens’, where residents will be able to help themselves to produce from communal fruit trees.

The application because of its size, is now to be referred to Mayor of London before full planning is given.

Jayne McCoy, Sutton Council’s Executive Member for Planning, Economic Development and Housing, said:“This groundbreaking development is the biggest regeneration project to get the green light in London this year.

“It will transform this area of the capital and help achieve our vision of making Hackbridge the UK’s most sustainable place to live, work and visit a reality.”