The fat lady sings for London concert venue Earls Court

Earls Court Exhibition Centre has long been renowned for crowd-pleasing extravaganzas by the likes of Elton John, Pink Floyd, Queen and the Spice Girls.

But the district in which it sits will soon be known as the site of one of London's biggest - and most controversial - housing developments.

Demolition work began this month to remove the classic 1930s' venue, which English Heritage had declined to list, with construction work on the first homes due to begin in the new year.

Developer Capital & Counties plans to build 7,500 homes and 1.5m square feet of retail and office space on the site of the exhibition centre, its car park and a neighbouring transport depot.

The £8bn scheme became the UK's highest-valued planning application ever when it was submitted for approval in 2011.

But it has proved highly controversial, with opponents complaining that the homes will be too expensive for the average Londoner. Two council estates will also be demolished as part of the plans, despite a vocal campaign by residents. The issue played a role in a change of administration at the local council of Hammersmith and Fulham, which has led to Capital & Counties being forced to renegotiate parts of its deal.

The area borders some of the most expensive properties in London, with one of Britain's most exclusive addresses, the Boltons, just 10 minutes' walk away.

The first 237 homes - dubbed Lillie Square and to be built on the Earl's Court venue's car park - went on sale in March at an average price per square foot of £1,500; half of the buyers were foreign.

Ian Hawksworth, CapCo's chief executive, said the site offered "a once-in-a-lifetime opportunity to create a vibrant new district in the heart of London".

Twenty per cent of the homes across the development would be affordable, he added.

This figure includes 760 properties that Capco will build to replace two existing council estates. Its plan to knock down the Gibbs Green and West Kensington estates has drawn it into a tussle with Hammersmith and Fulham council.

The battle began in the spring when the local Labour party, which backed council tenants in opposing CapCo's plans, won a surprise local election victory, taking control of the council.

New council leader Stephen Cowan said this autumn that his administration wanted to make a priority of "homes for residents, not overseas investors".

"All too often property developers treat the increase in land values in our borough as some sort of gold rush bonanza," he said.

An evaluation of the project's finances drawn up for planning authorities in 2012 and released to campaigners this year under Freedom of Information rules put the scheme's value at £12bn, 50 per cent more than the £8bn price tag stated by Capco.

Campaigner Jonathan Rosenberg said this showed that the company could afford to build more subsidised housing. "Where there's a will there's a way," he said. "A much higher level of affordable housing could be delivered."

Residents want to take ownership of their homes from the council, using new powers introduced by the government last year. This summer the estates' residents association voted to apply to Hammersmith and Fulham council in an attempt to use the community right to transfer rules.

The new political administration has embarked on a review of the council's contracts with developers, and negotiations are now under way with Capco. In October Mr Cowan reiterated his commitment to renegotiate the deal but said it was too late to block the concert venue's demolition.

He may find it is also too late to stop the council estates being flattened. The previous Conservative council administration sold the land on which the estates stand to Capco, which has already paid £30m of the £105m price.

Large parts of the project have full planning permission, and the area where the estates stand has received permission in principle, although the council has not yet granted detailed permission.

Perhaps the fat lady has already begun to sing.

London's mega-sites

A swath of huge sites scattered across Britain's capital are being transformed into homes and offices, in one of the biggest bursts of construction activity London has seen.

In addition to the Earl's Court project, developers are building 18,000 homes in the Nine Elms district of south London, which includes Battersea Power Station.

An Asian business district, a retail showcase and clusters of new homes are being constructed at the Royal Docks in east London.

King's Cross was one of the earliest schemes to get started, with tech giant Google leading a host of other companies into the office space being created there.

Developers are competing to build at Old Oak Common in west London, where football club Queens Park Rangers and retailer Car Giant have both put forward plans to create a housing district.

These five sites alone comprise more than 1,000 acres of development land. Schemes are also planned for the former Post Office site in Mount Pleasant, and Convoys Wharf in southeast London.

In total developers plan to build 35,000 homes each year during the next five years, according to figures from property advisers Savills - a big increase from the 19,520 built in 2013/14.

Even this is not enough: London is growing at a rate of 52,000 households a year, according to official figures.

Boris Johnson, the London mayor, said: "The cranes are swinging into action as work starts to build thousands of desperately needed new homes on sites that have in some instances been derelict for decades."

By 2030, London will be the first city in western Europe to house 10m people, Mr Johnson added: "These vast sites will provide the homes and jobs to ensure the city continues to grow sustainably."

Some architects and planners fear, however, that this rush to build risks leaving a legacy of ugly and unsuitable buildings for future generations.

"It seems to be a rule of thumb that the larger the area being developed, the lower the quality of the architecture," said Peter Rees, professor of places at University College London. "I can't help thinking that these areas will be grossly underoccupied with a large number of flats being bought for investment purposes."

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