Breaking his silence on the decision, Richard Murphy suggested neither the Balmoral Hotel nor the New Town itself would have been built under a planning policy characterised by "timidity and terror of our heritage".
He is meeting today with Irish developer Tiger, his client for the proposals for a 250 million hotel and office complex in Haymarket, which centred around the controversial 17-storey tower.
Mr Murphy said: "Edinburgh is on our side on this occasion. The city council wanted it to happen, the planning committee wanted it to happen, but I'm as surprised as anyone that the Scottish Government caved in to timidity." The Scottish Government called in the planning decision on the Haymarket site, a former railway goods yard now used as a car park, over concerns about the project's impact on the city's skyline and on a "prominent gateway" to the city.
Its decision said the five-star hotel would affect key views of nearby St Mary's Cathedral and Castle Rock. It would "not enhance the skyline" and would not preserve the setting of the Edinburgh Unesco World Heritage Site, creating a "negative impact on the gateway to the city at Haymarket".
The council is said to be deeply concerned the site will be left vacant and is keen for the developer to draw up fresh plans.
Mr Murphy said the controversial Haymarket project, though it was bitterly opposed by some critics, went through a "really good process" before it won council approval.
"Not everybody voted for it, but it was still a very good decision," he said. "We are still puzzled as to why it was called in. Timidity is the word. It sends a very bad signal.
"Whatever you think of the North British Hotel (now the Balmoral], we wouldn't have it if they had been through the same planning inquiry. You wouldn't have the New Town, if we had had this timidity and terror of our heritage, which is what it is boiling down to now.
"We are kind of haunted by our past now, and the idea that nothing could possibly contribute to the skyline of Edinburgh. It does send out a very bad image of Scotland."
Mr Murphy's stand has won the backing of some contemporary architects in Scotland who say other capital cities and World Heritage Sites, like Amsterdam, have learned how to insert contemporary buildings into historic settings. But conservationists argued it was out of proportion to the surrounding cityscape.
The architectural historian Miles Glendinning, at Edinburgh College of Art, agreed that the Balmoral hotel building, which opened in 1902, would not have been built today. For decades, 20th-century architects universally reviled the building, he said, as the worst example of Victorian kitsch.
However, he backed the Haymarket decision. "I certainly applaud it but, in a way, it was inevitable. Opinion all over the world has been turning decisively against aggressive iconic buildings, and this was an aggressive iconic building, and rather out of character of Richard Murphy."
Most of Mr Murphy's work, he said, had been "embedded" into the existing cultural and architectural setting.
Mr Murphy's architects' firm, which celebrated its 18th anniversary this week, has put its stamp on Scottish buildings from residential homes to art centres.
Award-winning designs have ranged from university campuses and housing projects to the Fruitmarket Gallery in Edinburgh and the 10 million British High Commission building in Colombo, Sri Lanka.
A Scottish Government spokesman said yesterday that ministers had "carefully considered" the evidence on the building.
"Ministers recognise the site has been identified as a development opportunity and hope key stakeholders can work together to find a solution which realises the site's potential."