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The retiring vicar of a Tufnell Park church earmarked for redevelopment has said she hopes the project will transform the site into a “haven for spiritual and physical growth”.

Melanie Toogood, who has been vicar of St George’s and All Saints church in Crayford Road since 2005, is leaving the job this month for health reasons, to focus on her charity work and to fulfil a long-standing ambition of writing a book about jazz and spirituality.

Speaking from the vicarage she will be leaving after 11 years, Ms Toogood reflected on her time running the parish.

“History will judge us, and it will depend on what side of the divide you stand, whether you think the church is a good thing or a bad thing,” she said.

“The parish has changed a lot. The physical boundaries of the parish and the people. We used to have a lot more people who lived in social housing, and lots of people have moved away. The turnover has been huge. But there’s a solid core of people who have been here for a long time who support it and who want it to go forward.”

The church has just submitted plans with Islington Council for a wholesale redevelopment which will see the church and vicarage demolished to make way for a new community hall and other spaces for community use, a new church and a seven-storey apartment block. Of the new 25 flats, four will be for social rent, two will be for shared ownership and the rest will be sold on the private market.

The proposals have been fiercely opposed by a group of nearby residents, who have raised concerns about the environmental impact of an “unnecessary demolition” of the church building. They say the development comprises “very little truly affordable housing” and believe the apartment block would have an “an irreversible negative impact on the local area and our community”.

But Ms Toogood defended the project, saying: “We’ve drawn up a plan to maximise the usage of the land for the community, opening up the space, having more spaces for charities to rent, new private and affordable housing. Islington needs homes.

“We are not doing this to make money, but to maximise the huge footprint the church has. It will be a place with better facilities, a lower carbon footprint and open doors. The [existing] church was built in the 1970s and is part of a 1970s culture which people no longer live in. The people who come here agree with me.”

Ms Toogood, 59, was diagnosed with breast cancer in 2013 and, though she has been given the all-clear following chemotherapy, she feels it is time for someone else to take over the parish and drive forward the regeneration project.

“You’re never really the same again after [surviving cancer],” she said.

“I felt I didn’t have the physical and spiritual ability to run a big parish. We have now come so far down the road [with the redevelopment] that it would be sensible for someone with a bit more energy and vision to take over. It is sad because I have loved being here.”

She hosted friends and members of her congregation for her 59th birthday party and leaving do at the Tufnell Park Tavern on Wednesday. She will vacate the vicarage and move to a flat off Upper Street, but will remain active in the church, while also taking up the role of Islington mayor’s consort in May, focusing on charity work.

In 2011, Ms Toogood, herself a keen saxo­phonist, took a sabbatical and travelled through the United States to explore how jazz – once viewed as the “devil’s music” – has influenced liturgical worship in the United States. “I want to see more jazz music in the church, that is my retirement mission,” she added.

A new vicar for St George has not yet been appointed. A public consultation on the church redevelopment plans runs until April 7.