After two years of uncertainty, the Helen Street artists' co-operative won a reprieve when the tribunal deleted the assessment and audit conditions imposed by Darebin Council.

Jeph Neale, sculptor and secretary of the Artery, described the decision as fantastic but regretted it was an exception rather than a change to the planning law. "It still means that the council can turn around and ask for a planning permit for anyone setting up artists' studios in an industrial 3 area," he said.

The dispute began when planning officers told the co-operative its use of the site did not meet the prescribed occupancy for an industrial 3 zone.

Mr Neale said he suspected the rigid planning laws were due to commercial interests. "The planners are out of step with the councillors. They don't actually like having artists here, and they see us occupying prime development land as problematic."

Darebin councillor Trent McCarthy welcomed the victory but said: "Until planning laws give greater protection to artists working in these kind of buildings, every artists' co-op is potentially under threat from poor planning laws that protect the interests of developers but do nothing to protect our culture."

In September Darebin councillors wrote to Justin Madden asking for a change to the land-use classification, but got no reply.

Planning Department spokesman Seamus Haugh said: "The department is considering whether this might be an appropriate statewide change to the planning system and will consult with councils as part of that process."

Carrying out the assessment at a cost of up to $60,000 would have almost certainly bankrupted the Artery.