Nag’s Head Market, Seven Sisters Road. Photograph: Google.

Councillors have approved plans for the use of part of the Nag’s Head Market as a food hall, while using their powers to limit its opening times and customer numbers in the face of local concern.

The Upper Place, a 16-unit street food market on the mezzanine floor of the market, got the go ahead from Town Hall planners with the proviso that it close at 8pm on weekdays and 9pm on weekends, and be limited to 130 covers in the non-vertical drinking establishment.

The planning committee acknowledged a breakdown in trust over the plans within the local community, with concerns raised by both objectors and their councillors over incremental development, disruption and gentrification, while applicants Pegasus insist they seek only to open a family-friendly, food-led venue.

Speaking in objection to the plans, local solicitor Kevin Jordan said: “These applications that are before the committee have been with the local community for the last two years. They have been decided upon previously by the local planning authority, who changed their minds in presenting these applications quite out of the blue to the committee.

“What we have here is unlawful development on a grand scale. We’ve had gradual creeping change of use, taking the market from retail to food and hot food. They’re operating brinkmanship with the local planning authority. You are being asked to approve all this unlawful development retrospectively.

“To say that residential amenity would not be affected by this application is quite utterly absurd. Our local councillors in Finsbury Park tried really hard for this applicant to maintain retail, to engage – they didn’t want to. The local community do not trust this applicant, and who would, with all of these planning violations.”

Cllrs Asima Shaikh and Gary Heather spoke in support of Jordan and other residents, with Shaikh arguing that the plans raise “a number of critical questions and strikes at the heart of what we understand as an inclusive economy”.

Shaikh, who leads on the inclusive economy and jobs for the Town Hall, revealed that she had been in touch with Nag’s Head market traders who have been forced out by rent rises, going on to argue that plans for the Upper Place would contribute to the gentrification of Finsbury Park.

Meanwhile Cllr Heather pointed to a London Fire Brigade prohibition notice issued to restrict the Upper Place’s use for reasons including that fire separation between floors was insufficient, that the means of escape was inadequate, and that fire protection for the means of escape was insufficient.

Market operators told listeners that this prohibition would be lifted with the granting of planning permission.

The planning committee meeting was marked by disagreement over the future of the retail market on the ground floor, held up as important to the local community by councillors, who pushed for its protection through the use of planning conditions, but with Pegasus casting doubt on its viability.

Director of the Nag’s Head market Colin Marner said: “We’ve struggled hard to keep the retail element there. The retail element in the country now just seems to going online. It is easier for people to buy whatever they want to buy, they don’t want to go out to the shops, which is a real shame.

“We have struggled hard to maintain the retail element here and we will continue to do so. We don’t want it to slip into a food element downstairs, we have it upstairs.”

Cllr Paul Convery retorted that he was “not convinced by the argument retail is somehow dying”, going on to argue that the small units in the covered market are “exactly the sort which will recover and serve a significant demographic”.

Characterising Pegasus’ approach to the market as “build and change the use first, seek permission later”, Convery added: “We are having to take a great deal of what they say on trust, in particular as to what the management plan will say and whether or not we feel confident that such a management plan would be faithfully implemented.

“When you have an applicant that you need to take on trust, sometimes you look back at past behaviour as a guide to future behaviour, and I have to say the history of this site is not a good one. This has been adversarial in style, it has been incremental in implementation.”

Responding to “significant concerns” from objectors over the potential impact from the Upper Place on residential amenity and noise nuisance, councillors chose to approve the application while restricting the numbers of people allowed to attend and its hours.

Planning committee chair Cllr Martin Klute noted the advantage of having legal constraints in place through an approved planning application, adding: “I would respectfully suggest that if we drift into the area of determining an application on the basis of the character of the applicant, it is not really a material consideration.”

Marner added: “Unfortunately some of the local people are getting the wrong idea about what is going to happen. This is not going to be a nightclub or a drinking venue for three or four hundred people that are going to be spilling onto the street. This is going to be a class establishment, upstairs is going to be offering very high quality specialist food from around the world.

“We just want it to be a very pleasant venue for people to come and visit, enjoy some food, bring their children along, enjoy the property, enjoy the premises, and leave quietly when they have finished.”