Simon Byrom has spent seven days sleeping in a tent balanced on wooden boards 20ft above the ground on land that will now be transformed into a 225-bedroom hotel by Dreamvale Limited Properties.
An Edinburgh Sheriff court judge ruled that Mr Byrom should vacate his temporary home to allow work to commence.
The self-seeded sycamore has since been felled and the wood will be donated to a local community project.
Mr Byrom said: “I’m feeling profoundly emotional, and now they’ve taken the tree down I feel we have been betrayed. I feel the whole system has let us down, the community down and the campaign down.”
Appearing for Dreamvale Properties – a joint venture between financiers William Pears Group and Jansons, which is leading the development – Kirstyn Burke told Sheriff Kenneth McGowan that Mr Byrom’s actions were creating a significant financial impact.
She said: “There is no reason why he should be on the property and he has a permanent address.”
Mr Byrom claimed the city council’s decision to approve the sale of the land and grant planning permission was “a dereliction of democracy” and that his opposition to the development was supported by councillors, the local MP, local MSP and the Old Town Community Council.
The land taken over by the developers had been public land for many years and had been set aside for the benefit of the people of Edinburgh and for the future of the Central Library, he said.
The library, he added, was “bursting at the seams” and needed to be renovated and extended.
But Sheriff McGowan told Mr Byrom he had no legal right to occupy the land or the tree and said the developers had a valid deed.
Mr Byrom replied that he had a “moral right” and it had been “a dishonourable sale”.
He complained that the Old Town community was in a parlous state as more and more properties were being turned into accommodation for tourists and students.
And those opposing the sale of the land have now launched a Judicial Review at the Court of Session to challenge the city council’s decision to grant permission for the development.
But Andy Jansons, on behalf of Jansons said he was pleased but not surprised by the outcome.
He said: “I respect everyone’s right to a view on development proposals, but this demonstration has raised very serious safety issues for our staff, the protestors themselves and indeed for local residents.
“We are relieved that this can be brought to an end and that construction work can commence.
“Our proposals will save listed buildings that are at risk, and they will bring an investment of £40 million and more than 200 jobs into an area where they are badly needed.”