Plans for a new ten-storey steel and glass office complex on the site have been approved by Westminster City Council and the GLA.
But Gove and his department have now stepped-in after campaigners claimed the building should be refurbished instead because of the amount of embedded carbon it contains.
Sacha Berendji, M&S Group Property, Store Development and Technology Director said: “After two years of working with Westminster City Council, the GLA and the local business and resident community which has supported the development at every stage, we are bewildered and disappointed at Michael Gove’s baseless decision to call in the proposed redevelopment of our Marble Arch site.
“The Secretary of State has blocked the only retail-led regeneration in the whole of Oxford Street in a building which was refused listed status due to its low design quality and, while safe, cannot be modernised through refitting as it’s three separate buildings containing asbestos.
“Twenty percent of units on Oxford Street lay vacant and the Secretary of State appears to prefer a proliferation of stores hawking counterfeit goods to a gold-standard retail-led regeneration of the nation’s favourite high street.
“All the while this political grandstanding goes on we cannot get on with creating a better place to shop for our customers, a better place to work for our colleagues, and a better public realm for the community in a store that would use less than a quarter of the energy required by the existing buildings.
“Indeed an independent assessment of the building’s carbon impact across its whole lifecycle concluded that the new build offered significant sustainability advantages over a refurbishment and, on completion, will be amongst the top 10% performing buildings in London.
“For a government purportedly focussed on the levelling up agenda, calling in this significant investment in one of our most iconic shopping locations will have a chilling affect for regeneration programmes across the country at a time when many town centres are being left behind and the property market is ever more precarious.”
The future of the site will now be decided following a full public enquiry led by a planning inspector.
The move follows calls by MPs for fewer buildings to be demolished to keep carbon locked-in.