Bosses at Springfield Hospital have decided not to appeal the council’s rejection of its controversial redevelopment.
The psychiatric hospital has promised to work with residents to draw up new plans, which will be submitted next summer.
The news comes after pressure from local groups led by Tooting MP Sadiq Khan.
He said: “I said at the time that the last application was thrown out that Springfield needs to tear up these plans and start again.
“Working together, we will see a much better development than if the hospital is working against us.”
Proposals for 1,200 new homes were rejected by the council in March after a record number of resident objections.
The hospital had the option of lodging an appeal with central Government, but have decided against this.
South West London and St George’s Mental Health Trust, which runs the hospital, claims the development is necessary to finance new facilities.
There will be a series of exhibitions in the autumn as part of a new community consultation.
Judy Wilson, new chief executive, said: “We remain committed to providing state-of-the-art mental health facilities here at Springfield and I believe we have already made significant progress through our work with Wandsworth Council to address some of the eight reasons for the rejection of our initial application. But we have more work to do.
“I have therefore taken the decision that we will not submit a revised planning application to Wandsworth Council until early next summer to allow plenty of time to talk to local residents to ensure we deliver a scheme that has their support.”
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