London Mayor Sadiq Khan’s decision to reject planning permission for a huge Las Vegas-style entertainment venue is to be reviewed by ministers.

Housing Secretary Michael Gove has opted to use his powers to “call in” the rejection of the 21,000-capacity, 300ft-tall MSG sphere in east London to decide whether it should stand.

The associated application for advertisement consent will also be decided upon by ministers in the Department for Levelling Up, Housing and Communities.

Mr Gove, it has been announced in a letter to the London Legacy Development Corporation (LLDC), has also ruled that there will be a local inquiry held regarding the planning application.

Mr Gove’s action, although commendable, still appears to us to be more of the same, and we cannot continue to participate in a process that can be so easily undermined by political winds

The Madison Square Garden Company (MSG) wanted to build its sphere venue in Stratford, with plans to illuminate it on the outside and have the highest resolution LED screen on Earth, along with immersive sound systems to host concerts, shows and sporting events.

But Mr Khan ruled last month that the Sphere, following New York-based firm MSG’s planning application to the LLDC, would not be allowed to be built.

The Labour mayor said the venue would cause “significant light intrusion resulting in significant harm to the outlook of neighbouring properties, detriment to human health, and significant harm to the general amenity enjoyed by residents of their own homes”.

The mayor went on to say it would be “bulky” and “unduly dominant” and would not “constitute good and sustainable design”.

His rejection has now been called in, Mr Gove’s department confirmed in a letter dated December 1, with the action taken by planning minister Lee Rowley on behalf of the Housing Secretary.

Officials in the Levelling Up department said it would not be appropriate to comment on the proposal as the application is due for a ministerial decision in the future.

Sphere Entertainment, a sister firm to MSG, suggested its interest in building a venue in London was over despite Mr Gove’s intervention.

In a scathing statement, the firm suggested Mr Khan’s rejection had been “politically motivated” and that other global investors should “certainly be wary” of doing business in the UK capital.

A spokeswoman for the company said: “The entire five-year planning process was hijacked by the mayor and his bogus last minute report.

“Londoners should be dismayed that they are not going to benefit from this ground breaking project, and others looking to invest in London should certainly be wary.

“Moreso, everyone should be alarmed by how easily the Government’s established process was tossed aside by one politically motivated official.

“Mr Gove’s action, although commendable, still appears to us to be more of the same, and we cannot continue to participate in a process that can be so easily undermined by political winds.

“As we said previously, we will focus on the many forward-thinking cities.”

The 4.7-acre site was bought by MSG having been left empty since it was last used as a temporary coach park during the 2012 London Olympics.

MSG said thousands of jobs would have been created if the venue, modelled on a similar building in Las Vegas in the United States, had been approved.

A spokesman for Mr Khan said: “London is open to investment from around the world and Sadiq wants to see more world-class, ambitious, innovative entertainment venues in our city.

“As part of looking at the planning application for the MSG Sphere, the mayor has seen independent evidence that shows the current proposals would result in an unacceptable negative impact on local residents.”

The campaign Stop MSG Sphere London called Mr Gove a “disgrace” for calling it in and said it was “criminal” to review a decision the applicant no longer wanted to progress.

In a statement published on social media, the campaigners said: “Gove calling in this application is a colossal waste of public funds, as was the long, drawn out planning process.

“Khan absolutely did the right thing in rejecting it and the LLDC should have done the same, after a fraction of the time and money.

“To spend yet more public money on reviewing this atrocity, especially when the applicant isn’t even interested anymore, is criminal.”

Residents living near the proposed development site had reportedly said they were “insulted” after developers MSG allegedly offered blackout blinds as a way of mitigating the glow from the images emitting from the orb-like structure.