Barking and Dagenham council has had to pay out more than £17,000 after it was found to have acted unreasonably in its refusal of a planning application.

The site in question was the former walk-in centre in Upney Lane which Barking, Havering and Redbridge University Hospitals NHS Trust wanted to sell with planning permission.

The proposals, put forward in June 2011, would knock down the existing building and replace it with a residential development comprising 14 flats and 12 houses.

In May last year the council refused to grant planning permission on the grounds there were not enough local school places to accommodate new families living in the area and also that vehicle access was inappropriate.

But the NHS Trust made an appeal to the Secretary of State which was granted in January, as well as an award of costs of £17,416 against the council’s unreasonable behaviour in refusing the permission.

A council spokeswoman explained the reasons why permission had first been denied.

She said: “The proposed development had been assessed to yield 18 school-aged children and does not make a sufficient financial contribution to mitigate the adverse impact of these additional school places on local schools. “The vehicular access to the site is inappropriate for a scheme of this size and could result in unreasonable levels of noise and disturbance to neighbouring residential occupiers.”

The development is still in the pipeline but the land at Upney Lane has not yet been sold.

A spokesperson for the NHS Trust said: “The Trust has received offers for the site from various developers via a competitive fee bid process and we are in the process of evaluating the bids and drawing up contract documents ready for sale.”

Around 150 residents living nearby signed a petition last year against the redevelopment.