Revised plans for the proposed Croydon Arena, part of the Croydon Gateway redevelopment in London, have been rejected by the communities secretary, Hazel Blears.

The project, a partnership between developer Arrowcroft and the London Borough of Croydon, is one of two proposed regenerative developments for the 12.36 acre (5-hectare) site.

The rejected plans, designed by Michael Aukett Architects, involved the construction of a new 12,500-seat indoor arena for sports, business and entertainment uses. As well as retail units, restaurants, cafès and bars, a health and fitness centre and community health centre.

It also included 500,000sq ft of office space and 900 homes including a 35-storey residential tower.

In response to the decision, an Arrowcroft spokesperson said: "We are naturally very disappointed that the secretary of state has gone against the wishes of the London Borough of Croydon for a major mixed-use development.

"It would have delivered significant regenerative benefits to the town centre area and to Croydon as a whole. We will need to consider the reasons for the secretary of state's decision very closely before we can determine our options for moving forward."

A rival development, designed by Foster + Partners with Faulkner Browns, is led by the site's majority owner, Stanhope, and their financial backers Schroders Investment Managers. This development received planning permission in 2006, but unlike the arena scheme it does not have the council's full backing.

If the Stanhope project goes ahead it will feature a replacement 15,600sq ft (1,447sq m) Warehouse Theatre capable of hosting 200 visitors, a GP's surgery and 4.5-acre urban park with a 41-storey skyscraper to house cafes, brasseries and restaurants. It will also include 560 apartments and 900sq ft of office space.

David Camp, chief executive of Stanhope, said: "We are not surprised that the secretary of state has refused to grant planning persmission for the arena given the weaknesses in the scheme, which were identified at a public inquiry last year.

"Schroders and Stanhope will now take time to study the decision by the secretary of state to consider its implications. As an expected decision on Croydon Council's Compulsory Purchase Order has been delayed, we do not wish to say anything further at the moment."

Image: Ruskin Square development