Back to the drawing board for hedge fund boss's £38m dream

Chris Rokos, whose fortune is estimated at £100 million, spent £18 million buying a run-down hotel in a Kensington square two years ago.

He then drew up plans for a £20million transformation of the property, and pledged to give Kensington and Chelsea council £500,000 towards affordable housing as part of the deal.

But today it emerged that architects have been told to change the designs for his underground swimming pool.

Mr Rokos, 38, wants to excavate more than 60 feet to build a diving and plunge pool beneath the back garden.

The latest council report on the proposals stated: "There is increasing concern at the possible long-term effects of the recent trend to construct large basements and sub basements beneath properties, particularly with regard to the possible effects upon the stability of neighbouring property."

The hotel comprises two Grade-II listed Victorian town houses linked by a corridor. Council officers say the proposed room layout is "unsympathetic" and a modern glazed link between the houses is "out of character".

Since a planning application was first submitted in summer last year they have already forced Mr Rokos to redesign a modern rear extension to make it look more traditional. The location of the pool has also moved twice after fears were raised that it might compromise trees in the garden.

The latest setback came on 18 December when the application was due to be heard by the council's planning committee but was pulled shortly before the meeting. A spokesman for the council said: "The application was withdrawn by the officers for further negotiations to reduce the excavation. They are going to go away and revise it."

When it is complete, the development will have a total floorspace of 3,000 square metres - only slightly smaller than the Turbine Hall at Tate Modern (3,500 sq m). Facilities will include a gym, home cinema, internal climbing wall, eight bedrooms and a library.

A spokesman for Mr Rokos said he had worked closely with neighbours - even leading guided tours of the building - to win their support for the plans. When complete he intends to live in the property rather than sell it on.

He said: "Planning does take time, but we want to secure a permission. Mr Rokos has said he would like to live in the house forever."

Mr Rokos, who lives in Kensington, began his career at Goldman Sachs and is now a partner at Europe's largest hedge fund managers, Brevan Howard. This summer - before the credit crunch - it was announced that the firm had increased its assets under management from $15.2billion last year to $26.3 billion. A decision on the new designs is expected to be made on 20 January.