With streets filled with buskers, fire-eaters and performers, and every basement bar and semi-derelict dive doubling as a theatre, Edinburgh is in full festive swing. But while many locals are kicking up their kitten heels and loosening their ties to join in the party spirit, a few are in anything but a convivial mood.

Edinburgh Council’s approval for an enormous ‘Walnut Whip’ hotel and retail complex, to replace the St James Centre, has rendered some almost speechless with astonishment and rage. In response to designs for a massive development, including 750,000 square metres of retail space, 30 restaurants and a multi-screen cinema, emails headed “I’m outa here if they do this to us!” have been circulating like socks in a tumble drier.

Demolishment of the St James Centre has, of course, been eagerly awaited since the day it went up. An eyesore from its first appearance in 1973, this concrete carbuncle was a lesson in the dangers of brutalism. Yet what has now been agreed promises not only to replace one carbuncle with another, but to make the site even uglier. Who would have thought it possible?

The hotel that will dominate this development is intended by architects Jestico and Whiles to evoke the "festival spirit of Edinburgh" and the "fabric forms of high fashion". In another city, with space to breathe and flanked by more modern buildings, it might work. Where it is intended to stand, however, it will rise like a body-builder on steroids, chest inflated and arms akimbo as it intimidates everything in its environs.

Grenade-shaped, it is swathed in wrap-around strips meant to look like ribbons. Curling around the hotel like apple peel, these will rise 19 metres above roof level to create a spire that has more in common with a lightning conductor than anything Robert Adam or William Playfair would recognise.

In giving this the green light, Edinburgh Council has ignored its own expert advisors, who say that such an edifice “would adversely affect the character and appearance of the New Town Conservation Area and would have a detrimental impact on the Outstanding Universal Value of the World Heritage Site." Not only will it overshadow its neighbour, Robert Adams’s Register House, which is one of Britain’s finest neoclassical public buildings, but the tone of the New Town will be sorely compromised. It is such a bad decision you might almost think that the council is wilfully destroying the very thing that makes the Athens of the North special: its magnificent yet elegant Georgian skyline, its jewel box of an Old Town, with its medieval tenements and closes, and a city centre graced by the brooding Edinburgh Castle. Among the castle’s many assets is that it draws the eye away from other crimes against sensibility along Princes Street, excrescences permitted by councillors long since gone, but whose spirit clearly lives on in City Chambers.

Instead of helping to protect and enhance the very qualities that attract visitors in their millions, the capital’s philistine panjandrums seem more concerned to cater for those coming to party and shop. Not that there’s anything wrong with either, but for the city’s caretakers actively to ruin its appearance to satisfy such demand is the cultural equivalent of a war crime. That might have been understandable, if not acceptable, in the aesthetically challenged decades of the mid 20th century, but in today’s more enlightened era, for our lieges to choose bling over sophistication, commerce over peerless beauty, is staggering. It is, as one protestor has said, “like inking a tattoo on Michelangelo’s David”.

Of course, Edinburgh has already been desecrated under this council, notably with the incongruous and dreary Caltongate Development near Waverley Station, currently under construction, and the likely redesign of the Royal High School into yet another hotel.

One suspects that unless the capital’s true guardians form a high-profile and vocal lobby, no amount of protest will change the council’s stance, and perhaps not even then. Meanwhile, the outraged feel utterly powerless. If councillors will not heed their own officials, then democracy is effectively dead. Nor is the threat of losing World Heritage status the prime concern, mortifying though that would be. The biggest fear is the loss of the city as we know and love it.

Those who accuse the project’s decriers of being stuck in the past could not be more wrong. They are, in fact, a great deal more forward-thinking than the council. Protecting Edinburgh’s unique architectural heritage is a duty and an obligation upon those in power, not a question of taste or fashion. But it is also to its enduring economic advantage. As artist Hugh Buchanan puts it, “If that means living in a museum, well, what a privilege, especially if that museum happens to be a massive income generator.”