Supermarket chain Sainsbury's has pulled out of plans to turn a Sydenham boozer into one of its stores, while its proposals for another pub development hang in the balance.
The company had intended to open an outlet at the old Windmill pub in Kirkdale but faced problems when locals had it listed as an Asset of Community Value.
Sainsbury's, however, has blamed difficulty in buying land at the rear of the Windmill building to allow deliveries for its decision and says the store is "no longer viable".
Meanwhile, the chain still plans to open a Sainsbury's Local on the site of the old Greyhound pub, but progress on that project has stalled following a series of blunders by developer Pure Lake who knocked down the pub without consent in 2012.
Ward councillor Coun Liam Curran said: "This is good news for Kirkdale and Sydenham. Local residents have fought long and hard to prevent Sainsbury's taking over The Windmill as they already intend to open a Sainsbury's at The Greyhound, just a few hundred yards away in the same road.
"Pub operators across our borough have shown time and time again that it's possible to run successful, popular busy pubs in Lewisham and I hope that the freeholders of the property will now get The Windmill up and running for the benefit of Sydenham residents.
"We now look to Pure Lake to get The Greyhound re-built and re-opened as soon as possible."
Sainsbury's regional acquisitions manager for south east London Rob Mellor said: "We are very disappointed that we cannot bring this site forward as we believe it would have made a positive contribution to the vibrancy of the high street and prevented this site from remaining vacant.
"The store would also have created new jobs for the local area and brought further choice to local residents who enjoy the convenience of shopping locally.
"Notwithstanding the complex nature of assembling the site to enable us to operate the store with minimal impact on our neighbours, the project is no longer viable and unfortunately we can no longer proceed with the
Nobody from Pure Lake was available for comment.