The project aimed to demolish the William Sutton Estate build to make room for private units for sale.
The Secretary of State for Housing, Communities and Local Government blocked Clarion Housing's plans following revised proposals.
GMB has welcomed the planning decision after it previously submitted an objection to planning application submitted by the Sutton Trust to redevelop the Sutton Estate.
Warren Kenny, GMB Regional Secretary, said: "GMB is very pleased with the Secretary of State for Housing, Communities and Local Government's decision to reject the Clarion Group's appeal for planning permission for proposals that would have led to the loss of nearly one third of the social housing units on the William Sutton Estate in Chelsea. GMB had branded this development a blatant case of asset stripping.
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"Clarion must not forget the primary reason of a housing association is to provide low cost housing to those on low incomes or those who need extra support. Nor must it forget that the Sutton Dwellings Trust was founded to provide 'model low-rented dwellings for occupation by the poor of London and other towns and populous places'.
"GMB has consistently supported residents fighting for their voices to be heard on proposals for demolition of their estates. We salute the residents of the Sutton Estate in their fight to retain social housing in Chelsea. We are supporters of Demolition Watch London in its campaign for all residents on estates facing demolition to be balloted on redevelopment plans with no loopholes or exceptions. This is the only way to stop asset stripping and the loss of social housing."
Cllr Ian Henderson, Chair of the Chelsea Association of Tenants and Save The Sutton added: "I think this is a great day for the residents of Kensington and Chelsea and for all the other housing battles that are taking place across the country.
"London needs homes for Londoners, not investment vehicles for international hedge funds.
"Social housing tenants across the UK can take heart from this decision. Just because your landlord says it needs to be knocked down, it isn't necessarily so.
"We call for a halt to the 10 year managed decline of the estate and for Clarion to meaningfully engage with residents and the council, so we can get people out of temporary accommodation and into a home."
(CM/MH)
