An appeal against a decision to block the building of a four-storey shopping arcade in a conservation area was rejected yesterday.
The plan included shops, offices, restaurants and six apartments at 73 High Street, Wanstead.
A three-storey building was also included in the proposal, with a basement, three live/work units, six one-bedroom flats and three studio apartments.
The plan was originally rejected in May, and an appeal to Redbridge council was rejected yesterday.
The company behind the plan, Ilford-based Mammoth Texryte Ltd, said in October last year that the development would add to the area by providing units for local businesses, artists and entrepreneurs at an affordable rate.
Conservative Cllr Colin Cronin of the Snaresbrook ward said: "This is the right decision for Wanstead's High Street and for local residents.
"It sends a clear message that we care for our High Street, for Wanstead and that overdevelopment will not be tolerated."
Chairman of Wanstead Society, Geoff Horsnell, said: "We immediately put in a letter of objection because of the sheer size of the plan.
"It also does not fit with the existing style in the high street and it would just look out of place.
"My bet is they will come back with another application and there is not anything we can do about that."