The building of flats at King Street, Yeovil, is likely to go ahead after district councillors approved amended plans.
Applicant Gadd Homes Ltd were denied planning permission for a four-storey development last autumn and subsequently appealed against that decision.
A public inquiry was set to start on February 26th to deal with the appeal, but amended plans showing three storeys were accepted at a meeting of the district council's Area South Committee last week.
A member of the public spoke against the proposal at the meeting, saying amended plans offered no real change compared to the previous proposal.
The applicant's representative also spoke and said there was no need for the appeal if councillors accepted the application before them.
Councillor Peter Gubbins, who was a leading figure in last autumn's refusal, said the applicant had given something and he was now prepared to vote in favour of plans.
Councillor John Vincent-Chainey commented: "It is my belief that the applicant has come up with the best deal possible."
Fears were also expressed that it could cost the council money if the appeal hearing was lost.
Councillor Julian Freke said he still had concerns about parking, but was promptly reminded that parking was not an issue.
Councillors voting unanimously in favour of approving the amended plans.