Planning permission has been given to one of the biggest urban regeneration schemes in the UK.

Schroder Property Investment Management, on behalf of Hackbridge Property Unit Trust, was last night granted planning permission by Sutton Council for a new, £150m innovative and green neighbourhood on the Felnex Trading Estate in Hackbridge, Sutton.

The development is anticipated to result in over 500 jobs and 725 new homes, a doctor’s surgery, a new supermarket, bus interchange, shops and business units, based around communal open spaces and a central public square.

Flexible offices, workshops and studio spaces will also be provided in a ‘Business Forest’, catering for the needs of local businesses. These units will be set in a green environment with high quality planting and landscaping.

The development will spearhead regeneration for Hackbridge to become the UK’s first sustainable suburb.

The first phase of the development is set to begin in 2012 with the building of a new 4,000 sq m supermarket and a number of residential flats.

Because of its size, the application is now to be referred to Mayor of London Boris Johnson before planning permission is formally granted.

The council’s development control committee approved a revised application last night after raising concerns at a previous meeting.

The number of apartments has been reduced by 61 units and the number of family homes increased by 11 units.

Open space has been increased to enlarge Hackbridge Green and there will be two new play areas for children. The buildings fronting on to London Road have also been reduced in height to six storeys.

Jayne McCoy, Sutton Council’s Executive Member for Planning, Economic Development and Housing, said:“This groundbreaking development is the biggest regeneration project to get the green light in London this year and is a landmark example of how Sutton continues to attract investment, new business and housebuyers to the borough.

“It will transform this area of the capital and help achieve our vision of making Hackbridge the UK’s most sustainable place to live, work and visit a reality.”

Neil Meredith, of Schroder Property Investment Management, said: “We are delighted that we have received the go-ahead for this exciting new project. Our vision is to create a sustainable, innovative development that will spearhead Hackbridge’s regeneration.

“We are proud to be developing the Felnex Trading Estate as an exemplar sustainable project, in response to the ambitious aims and aspirations to make Sutton the UK’s first sustainable suburb.

“This development will make Hackbridge a better place to live, work and play, and will bring new family homes, viable long term jobs and shopping opportunities back to the centre of Hackbridge.

“Landscaping is a vital part of our proposals and we will ensure that we create a high quality environment consistent with the London Borough of Sutton overall.”

Matt Willcock, director of Savills development management, said: “The redevelopment of the trading estate is a fantastic opportunity to create a much needed town centre for Hackbridge and will provide the new and existing residents with shops and services as well as modern living accommodation, all of which the area is currently lacking.

“The new development will also significantly increase the number of jobs for local residents.”