A 13-year battle to save a historic house on the edge of Hampstead Heath from demolition looks set to rage on, with the unveiling of new plans to knock down the 19th century home and replace it with a brand new luxury mansion.

Camden Council has received a new application from the owners of Athlone House, Athlone House Limited, to demolish the Victorian mansion on the Highgate side of the Heath and replace it with a new eight-bedroom home, including a ballroom, basement swimming pool and roof terrace.

The fight to save the mansion dates back to 2000 when it was first sold to developers who were given permission by the council to build luxury flats on the grounds, provided the house was restored.

It was sold again in 2005 to a new owner, believed to be a Middle Eastern billionaire.

In 2010, plans to demolish the home and build a new £80million faux classical mansion in its place were rejected by Camden Council and later by the Planning Inspectorate on appeal.

But while the council’s decision to refuse the plans was upheld by the planning inspector on the grounds the scheme was too large, the inspector paved the way for a new development – ruling the “damaged, unlisted building” could, in principle, be replaced by a more attractive option.

Michael Hammerson, of the Highgate Society, said the new plans were “extremely depressing”, adding: “We really feel this is the unacceptable face of the development profession and we will be fighting it.”

A spokesman for Athlone House said: “It is unrealistic to expect the new owner to implement the existing planning consent given the very poor condition of the building and the need to provide a very high quality living environment to meet today’s standards.

“The Planning Inspector accepted this reality and concluded that a new house would be acceptable subject to a high standard of design, which we believe [architect] Robert Adam has produced.”