The Scottish capital's prized world heritage position is facing "death by a thousand cuts" it has been claimed after revamped plans for a £1bn shopping centre and hotel were given the go ahead.

Edinburgh City Council planner backed a raft of changes to the new St James quarter planned for the east end of Princes Street - many related to improving bicycle and pedestrian access - but it is claimed the developer failed to address concerns by the watchdog on the ground, Edinburgh World Heritage, over the aesthetics of the centrepiece hotel.

Separately, one senior heritage source said the accumulation of concerning developments in the city will inevitably smash the heritage dream.

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The largest development of its kind ongoing in the UK, the rebuilding of the St James Centre around the flagship John Lewis store will include the controversial "ribbon" hotel, which attracted a 600-name petition against its design and has now incurred the criticism of EWH.

Projects including the St James Centre and the planned hotel for the old Royal High School prompted fears such developments could lead to the loss of the city's Unesco World Heritage Site status, which brings major tourism and financial benefits.

Although rare, Dresden in Germany was deleted from Unesco's World Heritage list in 2009 because of a bridge that was judged to have undermined its "outstanding universal value", a key factor of the status award.

A source connected to ICOMOS - the UK national committee of the International Council on Monuments and Sites, which has a special role as official adviser to Unesco - said the city's outlook is "chronic and progressive rather than acute".

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He said: "Edinburgh, taken as a whole, is not that easy to wreck.

"It is ‘death by a thousand cuts’, but it is proceeding inexorably."

The St James Quarter, due for completion by 2020, will create 5,000 jobs during construction and 3,000 permanent jobs.

However its design has been controversial.

The hotel was criticised by Edinburgh-based writer Candia McWilliam who said it is an eyesore that resembles "dog dirt" and is an insult to the city's architectural heritage.

Adam Wilkinson, of EWH, said in a submission to the council: "Tall structures in the city centre are generally tall, slender and not inhabited at height.

"EWH's position on the hotel has been, to date, that it should seek to lessen its impact on the skyline through reducing floor area at upper levels.

"While some steps have been taken towards this, the proposals are still for a large building that will sit on the city's skyline, as opposed to piercing the skyline, and that it will still have a negative impact on outstanding universal value."

He also said: "We are aware that a comparatively large number of changes are proposed to aspects of the scheme.

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"These are not minor changes, and represent a further watering down of a design that, in our view, already left a good deal of room for improvement to reach the standards of the New Town."

Martin Perry, director of development, TH Real Estate, said: "Following the approval of our proposals for the development last August, we submitted a further planning application earlier this year.

"This reflected the introduction of tenants, operators and partners’ requirements and allowed us to address some of the earlier concerns of key stakeholders, heritage bodies and the council.

"This feedback has allowed us to evolve the design of the development and make some changes, including refinements to internal designs, building heights and scale.”