Councillors were told that a planning policy required a separating distance of 27m between facing upper floor windows, but the nearest facing ones were 19.3m apart.

Also, the scheme’s footprint was 28 per cent greater than existing buildings.

Harpenden resident David Newton told the committee the six-storey high block would be ‘visually intrusive’ and set a dangerous precedent if approved.

Cllr Maxine Crawley said: “What’s there is obviously not nice and needs to be replaced, we all know that.”

The Society would strongly support redevelopment within the main hospital building, which could provide a substantial number of mixed sized of apartments within a building of character. Such an attractive development in this highly desirable location would be highly marketable.

Developers PegasusLife confirmed it has put a strip of land in Brassington Avenue and the railway line up for sale as it would not be able to start building work ‘for a number of years’.

Planning permission had been granted for five ‘rotated’ tower blocks with 240 retirement apartments in October last year and would have included a private cinema, indoor swimming pool, fully-equipped gym, a restaurant and café.

But no building works had taken place on the site and a for sale sign was erected this month.

Peter Askey, operations manager at Pegasus Life said: “Unfortunately due to the enormous demand that we have throughout the UK to develop over 37 sites we would not have been able to commence activities in Sutton Coldfield for a number of years and we therefore took the decision, through Savills, to put the site on the market to give other developers the opportunity to take this site forward.”

The Winchester-based firm had purchased 12 sites around the country and with asset manager Oaktree Capital Management had pledged to invest £500 million into the schemes.

But the proposed development has once again stalled just like the proposed £12 million scheme by City Lofts which in 2005 had planning permission for ‘Park Point’, with 295 apartments, a restaurant, three shops, two bars, a health and fitness club and multi-deck car park.

City Lofts went into administration in mid-2008 at the start of the ‘credit crunch’ and property insolvency specialist Allsop had been looking to sell the land to a supermarket chain, with outline planning permission granted by Birmingham City Council in 2012. However there were no takers and PegasusLife bought the land in 2013.

Sutton Trinity councillor David Pears said: “It sounds to me like they haven’t drummed up enough interest in it and people willing to put up the money.

“It’s good news potentially that we are not going to get five high rise apartment blocks on the site.

“But it’s bad news with further uncertainty on what is going to happen with that site. It gives us an opportunity to influence what goes on there and keep it in character with the town centre.

“Perhaps in the meantime the land could be used for parking before Christmas.”

Fellow Sutton Trinity councillor Ewan Mackey described the situation as ‘sad news’. He said: “I was pleased in one sense that something was being done with that land and would bring some money into the town and change that bit of an eyesore. It looks pretty bleak there now and nobody really uses that corner of Sutton.

“But it’s a good opportunity for someone to come in and put for some better plans that are aesthetically pleasing.”