Part of the meat trades' heritage which was earmarked for refurbishment has had its application turned down by a government department.
The listed Red House building and the site of the old General Market building were proposed for development by regeneration specialists Thornfield Properties, but the London and Leeds based company had its plans rejected by the Department for Communities and Local Government.
In a decision written on the behalf of Secretary of State Hazel Blears, Jean Nowak of the Planning Central Casework Division said: "The Secretary of State agrees with the Inspector's reasoning and conclusions of the character and appearance of the surrounding area including the settings of nearby listed buildings and conservation areas.
"She therefore agrees with the Inspector's conclusion that the buildings on the site make a significant positive contribution to the character and appearance of the Smithfield Conservation Area.
"She also agrees that the demolition of the General Market Building, and the canopies that link it to the Poultry Market to the east and the Annex to the south, would significantly detract from the market complex as a whole."
The buildings on the site, commonly known as the western market buildings, were built some time during the mid to late 19th century.
Nowak added: "She (Blears) also agrees that the modern intervention behind the Annex facades and the Red House would dominate the facades and be detrimental to the character of the building."
Thornfield Properties may be able to challenge the decision if they wish at the High Court.