Haymarket development is given go-ahead despite likeness to buildings that were banned

Councillors voted unanimously in favour of an eight-storey scheme next to Haymarket railway station, which its architect claims will see the creation of a new "monument" in the capital's West End.

But campaigners said they were hopeful that plans for the site would be called in for a third time because of the impact they would have on the area, particularly the nearby Dalry Colonies.

Council officials admitted the development, which will now be dominated by two large office blocks, was "largely similar" to the one which was turned down after concerns were raised by Unesco inspectors about its scale and design.

Critics fears the new development is still out of keeping with the area and wanted it put on hold until plans for a new railway station are developed further. But the scheme was approved after an initial three-hour hearing yesterday.

Barbie Lyon, spokeswoman for the Dalry Colonies Residents' Association, said local people had been denied a proper say on the proposals. She added: "This development is just not Edinburgh. It is not what we deserve."

One local councillor, Donald Wilson, said: "We should've gone back to the beginning with a blank page but very little has changed with this scheme, around 90 per cent of it is the same."

There were also demands for the scheme - which will involve offices, supermarket, bars, cafes and a 245-room hotel - to be scaled back because it is just outside the city's world heritage site and will be visible from several vantage points across the city.

Irish developer Tiger, which ditched plans for a five-star hotel on the site in May, has insisted work is now ready to start within months due to the levels of interest in the scheme.

Simon Fox, development director at Tiger, said the firm was in advanced talks with a prospective tenant for the major office building on the site, with operators for the hotel, car park and supermarket also lined up.

He added: "We are speaking to a major operator looking for a headquarters building. They could go into any city in the UK or in Europe, but want to open this office in Edinburgh."

Award-winning Edinburgh architect Richard Murphy, who also designed the previous scheme, said the development would become a "very attractive prospect" at the end of existing thoroughfares, such as Grove Street and Grosvenor Street.

He added: "There seems to be some kind of defeatist attitude that this area is always going to be in the economic doldrums.I don't believe that."

Maria Kelly, chair of Gorgie Dalry Community Council, said: "It's not a case of this scheme being better or worse than the last one. It was the wrong decision then, and it's the wrong decision now. If the government has any sense it will call for another public inquiry."

The former railway goods yard was a contender to become home to the Scottish Parliament building, finally losing out to Holyrood despite a high-profile campaign by supporters.

The city council's development wing, EDI, spent years pursuing a scheme which would have seen new offices blocks and a shopping arcade on the site. Although the plans were rejected by councillors, the decision was overturned by the then Scottish Executive. But the council decided to sell the site to help fund a huge equal-pay settlement.