A public inquiry will be held into Liverpool City Council's proposed redevelopment of the Welsh Streets area of Toxteth which have faced opposition from conservationists for many years.
Cllr Mayor Joe Anderson said the call-in by Secretary of State Eric Pickles was "hugely frustrating and bitterly disappointing for the local community".
The council's planning committee approved plans on 23 July for a £15m scheme to deliver 150 new homes, refurbish 37 terraced properties and demolish 280 homes.
Anderson added: "These proposals were drawn up after extensive consultation with residents. It is residents that have been badly let down by this decision.
"This is hugely frustrating and bitterly disappointing for the local community. Residents have faced more than 10 years of uncertainty and delay, and made clear in no uncertain terms that they backed what has been put forward.
"We've been forced into this and so it must take place as quickly as possible. The uncertainty that this community have faced for far too long shouldn't be prolonged for a moment longer than it needs to be.
"I am personally fed up with government interference like this, which has now delayed local people having the good quality homes they deserve. All this community wants is certainty and the government has slapped them in the face with this decision. I am absolutely incensed that Mr Pickles, who supposedly champions localism, has ignored the overwhelming views of local people, and called this in, particularly when his own department has allocated funds towards the project."
Various groups opposed the plans, arguing more houses should be saved and the scheme should include other uses such as shops.
Local housing association Plus Dane could lose 50% of its funding for the project from the Homes & Communities Agency if the work is not completed by March 2015.
The plans have received extensive national media attention as Beatle Ringo Starr was born in one of the streets. His former home would be among those refurbished.