Cala Homes has welcomed communities secretary Eric Pickles' decision not to fight the company's claim that he acted unlawfully in turning down its planning application for homes at Barton Farm near Winchester.
The battle over the development has been raging since Pickles scrapped regional spatial strategies on taking office in 2010, a move Cala argued was unlawful.
Last September Pickles turned down the planning permission for the 2,000 home scheme saying it would undermine the local council's attempts to develop a new core strategy.
Cala lodged a judicial review against this, claiming the move was unlawful, being an example of "prematurity" which is not allowed under planning guidance.
The review was due to be heard this week, but the government dropped its defence yesterday and the schemes is now expected to go ahead.
A Cala spokesperson said: "We are pleased the secretary of state has decided to reconsider his decision on Barton Farm and hopefully this process will be completed quickly and positively so that the much needed housing provision can be delivered as soon as possible."
