Barracks chapel stands in way of Chelsea sports centre plan

The former military chapel is the only part of the original 1862 building left, as work continues on turning the site into one of Britain's most expensive housing developments.

But property developers the Candy brothers and their Qatari backers have announced they may be forced to reduce their financial commitment to a £40million sports centre, as any listing of the chapel will add to construction costs.

The chapel is at the centre of the £3billion project for 640 flats and is due to be demolished to make way for a public park.

Residents want to keep the building, claiming it is London's last remaining military church.

English Heritage and the Bishop of London have backed them, recommending the Government give the place of worship listed status. If it is designated Grade II-listed, it could not be demolished or altered without specific consent.

Heritage Minister Barbara Follett is expected to make a final decision on the building in the next few weeks, but property firm Qatari Diar and Christian Candy's Guernsey-based CPC Group are hoping to dissuade her from protecting it. The Qataris argue that the chapel was deconsecrated in the early Nineties, after which it was used as a store room by the Ministry of Defence.

A spokesman for the developers said today: "It is certainly not, as has been alleged, the only remaining military church building in central London, as the 'spiritual home' of the Guards is in fact the Guards Chapel at Wellington Barracks."

The developers intend to use part of the proposed 2.5 acre park to commemorate the soldiers who served at Chelsea Barracks, and have appointed an award-winning designer to develop a suitable "memorial concept".

The idea for a memorial has been backed by the Guards themselves and the Royal Hospital Chelsea.

The Qatari spokesman said: "If the chapel is listed, we will need to review the content of the proposed scheme including the extent of community benefits that it can provide."

The chapel was not listed when the current owner paid nearly £1billion for the site in April 2007.

A revised application for the site, containing 320 private and 320 "affordable" flats will be submitted to Westminster council at the end of this month.

The original plans were revised after concerns about the height of buildings. Westminster told the developers to change plans for the 13-acre location so it would include a park and avoid damaging local views.

Nick and Christian Candy bought the site with plans to transform it into a "world class" housing estate, aimed at the wealthy looking for a base in the capital.