Communities secretary Eric Pickles has stepped in to save Liverpool’s Welsh Streets, unexpectedly over-ruling the decision of his own planning inspector.

Pickles refused permission for a scheme, which had been approved by the council and would have seen 400 terraced houses demolished in the Toxteth neighbourhood where Ringo Starr grew up.

He supported many of the arguments advanced by Save Britain’s Heritage, the charity which forced the case to public inquiry last summer. At the end of that hearing the inspector, Christine Thorby, approved the scheme.

But in a surprise decision this month, Pickles ignored her decision.

Under the proposal, drawn up by Triangle Architects for Plus Dane housing association and the council, all but 40 of the houses in the area would have been replaced by just 227 new units.

In an 81-page decision notice Pickles wrote: “The secretary of state agrees with Save that the Welsh Streets are of considerable significance as non-designated heritage assets of historic, architectural, cultural and social interest…

“[He] is not persuaded that the scale of demolition proposed in this case has been demonstrated to be necessary and that sufficient forms of market-testing and options involving more refurbishment have been exhausted.”

As a result he concluded that the proposal conflicted with the recommendations in George Clarke’s Empty Homes Review.

He conceded that Triangle and Plus Dane had made an effort to complement the existing heritage and townscape, but disagreed that the design would fit in well with the character of the area.

“Rather, he agrees with Save that the design of the proposal is poor and fails to respond to local character, history and distinctiveness.”

Marcus Binney, president of Save, said: “This is a triple triumph. First for saving the streets where Ringo grew up. Second for recognising that these empty homes can be just as spacious and far outnumber the proposed replacements, and third for recognising the Welsh streets have value as a model neighbourhood laid out by one of Liverpool’s most significant builders.

“Our appeal to Liverpool council is simple: Let people live in these houses again. We have bought one house and made it a pleasant home. Now the others must follow.”

Clem Cecil, director of Save, saluted the secretary of state’s decision for acknowledging the streets’ heritage value at the highest level.

“Many inspiring projects are bringing empty homes back into use in Liverpool today and these streets can be next,” she said.

“We hope that this decision will bring a final end to demolition on this scale that was the hallmark of Pathfinder.”

Triangle Architects tweeted: “Baffling that @EricPickles can ignore local residents, @lpoolcouncil Planning Committee AND Planning Inspector on #welshstreets! #Localism?”