A key figure in the fight to save West Kensington and Gibbs Green estates earmarked for demolition as part of the Earl’s Court regeneration scheme has lodged a formal complaint with the European Commission.

Keith Drew says developers Capital & Counties PLC (Capco) received £1.5 billion of unlawful state aid which breached EU state aid rules in a deal that paved the way for the development.

He now wants to see the European Commission now launch a full investigation.

However, Capco has dismissed the move, saying it is a complaint without substance and the latest attempt from the same Earl’s Court opponent to attack the development.

Mr Drew is chairman of West Ken Gibbs Green Community Homes, the resident-controlled non-profit Community Land Trust (CLT) which aims to prevent demolition and put the community in charge of building new homes and making improvements to the estates.

He says the state aid arose when Hammersmith and Fulham Council’s previous Conservative administration signed a Conditional Land Sale Agreement (CLSA) for the sale of 22 acres of land occupied by the West Kensington and Gibbs Green estates for £90 million - which he believes is well below market value.

It is alleged this was done without testing the market by tendering it, and without including clauses to obtain any benefit from the ensuing uplift in land and property prices.

According to campaigners, the amount of alleged unlawful state aid provided by the council, which changed to a Labour administration in 2014, to Capco was estimated on four different commercial bases.

Keith Drew has lodged a compaint with the European Commission

The analysis was carried out by consultant Dr Richard Fordham which he says suggests state aid of £1.5bn.

This was calculated using figures Capco published in its annual results on February 25 this year, which showed the company valued the profit on a similar sized area of adjacent land at £1.274bn.

Mr Drew said: “The council entered into a contract for the sale of our homes to Capco for a pittance. They used state resources to confer a huge exclusive unfair economic advantage on a wealthy developer.

"That £1.5bn, belongs to us. If this is not stopped, Capco stand to make an obscene profit out of public resources, causing misery to a community of 2,000 people.

“I hope the European Commission will mount a full investigation.”

Aerial view of proposed £8billion Earls Court redevelopment

Opponents to the estates’ demolition say it would cost the council £140m to buy back homeowners and to obtain vacant possession from the secure tenants.

A statement by campaigners read: “Now that the European Commission has received the complaint it is for them to decide whether to mount an investigation. Should they find that there has indeed been unlawful state aid, the most suitable remedy would be either for the CLSA to be declared void and unenforceable or for Capco to pay £1.5 billion to Hammersmith & Fulham Council.”

Hammersmith and Fulham Council said it was unable to comment due to strict purdah rules which prevent public bodies making political statements in the build-up to an election.

But Capco expects the challenge to fail and said: “We believe the complaint to the Commission is without substance. The Conditional Land Sale Agreement in relation to the West Kensington and Gibbs Green estates is an entirely proper and robust contract.

“It was freely entered into by the London Borough of Hammersmith and Fulham further to independent professional advice, following all due process. It was subsequently approved by the Secretary of State.

“The Earls Court masterplan is consented, progressing well and remains unaffected.”