Controversial plans to build houses on Godalming Crown Court car park and replace lost spaces with a multi-storey have been scrapped with opponents heralding the “U-turn” as a “spectacular victory”.

It comes after confirmation that Waverley and Guildford borough authorities could close their own council offices and relocate under a shared building, continuing their piecemeal merger.

Waverley leader Paul Follows (Lib Dems, Godalming Central) said the savings mean the car park scheme – which drew a petition of more than 4,000 signatures – is now off the table.

The news was met with joy from the Godalming and District Chamber of Commerce and opposition councillors.

The plans had formed part of a regeneration project at three council-owned sites in Godalming; The Burys council offices, Crown Court car park and the Wharf car park.

Cllr Follows said: “The proposals for Crown Court were not anyone’s first choice but we also could not, as responsible councillors, just ignore the financial issues.

“As such, my colleagues and I have sought to explore other options to remove the need for this aspect of the proposals.

“Guildford and Waverley councils will explore co-locating to a site to be confirmed in the near future and subject to discussions and consultation with staff at both councils. At this point this isn’t a commitment to either of the current sites or even a totally different site.”

The Godalming and District Chamber of Commerce said it “warmly welcomed” the council’s decision “to U-turn on its plans”.

A statement read: “The chamber strongly objected to the main proposal, which was to build residential housing on Crown Court, the town’s main car park which is ideally situated in the middle of the retail centre, just a short level walk straight on to the high street and conveniently positioned for all businesses including those in Church Street and the Upper High Street.”

John Taylor, the chamber’s president said that 85 per cent of its current, past and potential members objected to moving the car park further away from the town centre

The news also welcomed by the opposite side of the political floor with Waverley Conservatives calling it a “victory for the local campaign” that “forced Liberal Democrat-led Waverley Council into a U-turn on their plans to develop the crown court car park and build a multi-storey car park in the town to replace it”.

Cllr Peter Martin, ward member for Godalming Holloway, said: “This is a spectacular victory for Godalming residents and local businesses, who united around this campaign, we had over 4,000 signatures on our petition against this plan and even the council’s own consultation showed their plan did not have the support of either the community or local businesses. I’m delighted that the Liberal Democrats have been forced to listen.”