Campaigners who want to bring the former EMD cinema back into use have called on its religious owners to sell it, after a bid to overturn a decision blocking it from being turned into a church failed.

The government today dismissed an appeal from the United Church for the Kingdom of God (UCKG) to overturn Waltham Forest Council’s decision to reject its bid to turn the site into a centre of worship.

The government’s planning inspectorate rejected the church’s appeal because Walthamstow is in “sore need” of regeneration, which it believes would be better provided by the site becoming an entertainment venue once again.

Bill Hodgson, of Waltham Forest Cinema Trust and The McGuffin Film Society, said: “This decision is long overdue. The UCKG must now finally listen to the people of this borough and allow the venue to be revived for the benefit of the whole community.

“A cinema like this is irreplaceable. We would like to thank the thousands of local residents who have supported our campaign over the last ten years.

“We sincerely hope a resolution is now in sight.”

Trust chair Neil Gerrard added: “I’m so pleased. It’s absolutely brilliant news but there’s a lot of work to be done now.”

The announcement comes just two days after case officer Hannah Beck wrote to the church and Waltham Forest Cinema Trust to announce the decision was indefinitely delayed.

No re-scheduled date was provided but after today’s news campaigners hope the church will sell up soon so they can begin work on the entertainment venue.

The group bought the listed building in 2002 but has repeatedly failed to get planning permission to convert it into a place of worship.

Walthamstow MP Stella Creasy said: “I'm overwhelmed with relief at the news. I urge the UCKG to accept the settled will of the Walthamstow public and honour the decision of the inspector by selling the building back so that we can get on with the next stage of our work bringing the EMD back to life.”

However, if the UCKG does not sell up, the council will step in and issue a compulsory purchase order (CPO) to force the church to sell the grade II*-listed site.

The council would then sell it to a group with sufficient funding to turn the building into an entertainment venue.

Council leader Chris Robbins said: “The council has pledged to do what it can to support Waltham Forest Cinema Trust and Soho Theatre's plans that will see the building transformed into an entertainment destination."

However, the UCKG has not yet indicated what its plans are.

A spokeswoman for it said: “The trustees now have to consider the report. They will be making a statement when they are ready.”