The developer behind the controversial King Alfred plans says it is "full steam ahead" for the scheme after the Government gave it the green light.

Ruth Kelly, the Secretary of State for Communities and Local Government, had the power to block the scheme but chose to take no further action over the giant housing and leisure project in Hove.

The Government Office for the South East (GOSE) yesterday said intervening would not be justified as there was not sufficient conflict with national policies.

And this reinforces Brighton and Hove City Council's decision to grant planning permission for the proposals earlier this year.

Opponents hoped Ms Kelly would "call in" the application and overturn the council's decision.

They are still hoping to stop the scheme in its tracks through a legal loophole or court action.

The new Conservative-led administration in Brighton and Hove could try to stop the development now the party has the highest number of seats on the council.

However Karis, the development company behind King Alfred, said: "We are absolutely delighted that GOSE has confirmed they will not be calling in the plans.

"We never doubted that they would - the proposals meet local needs and it is quite proper that the local decision should stand.

"It's full steam ahead now and we look forward to delivering this fantastic project as soon as possible."

The £290 million development was designed by world-renowned architect Frank Gehry to replace the eyesore leisure centre on the seafront.

It will have 751 homes in 11 buildings, including two towers up to 98 metres high.

There will be a £49 million sports centre, small shops, a police office, a GP surgery, public toilets, cafes, restaurants and public spaces.

Council chief executive Alan McCarthy said: "We are pleased that the Secretary of State has allowed this decision to be taken locally."

Brighton and Hove City Council approved the project in March.

The plans were approved on the casting vote of Councillor Les Hamilton, the Labour chairman of the planning sub-committee.

The development was championed by Labour. The party subsequently suffered huge losses in this month's elections.

Councillor Gill Mitchell, acting leader of the Labour group, said: "I am delighted at this outcome and that this development, which will bring much-needed housing and superb leisure facilities to the city, can move ahead without further delay."

But the Conservatives, who opposed it, could use their increased power to find a way to halt the plans.

Councillor Brian Oxley, who is expected to become council leader next week, said: "The Conservative group has stated clearly that it is opposed to this scheme and that remains our position.

"Given the Secretary of State's decision, I have asked our officers to advise me on the best way forward.

"I expect to be having discussions next week at the earliest opportunity."

Councillor Averil Older (Conservative, Central Hove) said: "It was pushed through in the dying stages of an arrogant Labour administration who welcomed Frank Gehry to our city.

"This scheme was too large and went in the face of vehement opposition and should never have been granted on the casting vote.

"I believe the scheme is too expensive and will never get built. King Alfred is falling into disrepair while the developer sits on a very important site with planning permission."

Valerie Paynter, of pressure group Save Hove, said she would be pressing for a judicial review of the decision.

She said: "King Alfred will not work for creating new housing because it is just a series of bolt-holes on the seafront for second-home owners.

"The Government has doubled its political effort to concrete over the South."