SMITHILLS Coaching House will be converted into homes — after Communities Secretary Eric Pickles made the decision not to step in and prevent the scheme from going ahead.
Developer Jones Homes had already won planning permission to convert the 17th Century Victorian Grade II listed building into eight properties.
A further 21 houses will be built on surrounding green belt land.
The proposal to transform the former restaurant, which closed in August last year, was approved by Bolton Council’s planning committee in December.
But the scheme had to be referred to Mr Pickles as it was on protected green belt land and is a heritage site.
He had originally asked for more time to consider the plans but has now decided not to “call in” the decision — and the development will now go ahead.
Brian Tetlow, chairman of the Bolton and District Civic Trust, said: “I’m astonished, I don’t think he’s doing his duty.
“I think there will be a continuing campaign to highlight the failure of councillors to recognise what an outrageous proposal this is.
“This is historic and precious land.”
Smithills councillor Roger Hayes, who has campaigned against the plans, added: “I’m deeply disappointed but not very surprised.
“The Secretary of State is usually only minded to intervene on issues of regional significance.”
The plans have proved hugely controversial, and raised a storm of objections from campaigners as well as English Heritage, the organisation charged with the protection of the country’s historic buildings.
Jones Homes insisted at last month’s planning meeting that the plans were the best way to preserve the future of the building.
Planning committee member Nick Peel said: “I’ll just reiterate the point I made at committee. It’s the only viable option that retains the Coaching House as a heritage asset.
“What goes on inside it, whether it’s a restaurant, a pub, whatever, is largely academic. We’re talking about the retention of a historic building in Bolton.”
The building was originally built as the stables for neighbouring Grade I listed Smithills Hall.
The project will be able to go ahead once a Section 106 legal agreement is signed for Jones Homes to fund construction of a car park and landscaping improvements.
A Bolton Council spokesman said: “The Department for Communities and Local Government has confirmed that the planning applications for Smithills Coaching House are not going to be referred to the Secretary of State and that they can be determined by Bolton Council.
“The planning department and legal services will now draw up a Section 106 legal agreement and the final decision notices for approval will be issued upon the completion of this.”
Jones Homes declined to comment.