Deputy London Mayor Kit Malthouse has said Prince Charles "was not pivotal" in a decision to drop the redesign of Chelsea Barracks.
The plans were to build 552 modernist flats designed by Lord Rogers on the 12.8-acre site, which the Qatari Diar CPC consortium bought for £959m.
In March 2009, the prince wrote to Qatar's royal family to say that the modernist design was "unsympathetic".
The Qatari developers dropped the scheme in June of that year.
Mr Malthouse, who is also the London Assembly member for Westminster, said: "I don't think anyone should be under the impression that he (Prince Charles) was pivotal in getting the scheme turned down.
"For the Prince of Wales to write a letter on a private basis to another head of state seems a perfectly reasonable thing to do and we welcomed it in Chelsea."
He added: "I'm not sure why there's so much fuss about it. It was a monstrous scheme.
"If the Prince of Wales had anything to do with the delay and re-think, we're grateful to him."
But Paul Finch, who chairs the Commission for Architecture and the Built Environment, said: "In this instance it has had a very unfortunate consequence that the normal democratic processes of planning can be subverted on the basis of arbitrary interventions.
"This is bad for London and bad for investment.
"It's not for any individual to interfere as style police."
Developers Candy Brothers claim the project fell through after the Prince of Wales complained to their partner.
In May 2010, the developers lodged an £81m claim at the High Court, blaming Prince Charles for the withdrawal of a planning application.
They said their Qatari partners were swayed after the prince complained about the scheme.
But Qatari Diar's lawyer has said the allegations were "unjustified".
The claim is still to be settled.