Last year a judicial review – brought by local campaigner Jerry Flynn – failed when Mr Justice Dove ruled – after a two-day High Court hearing – that the claim should be dismissed.
This week the Court of Appeal granted permission to appeal that ruling. No date has yet been set for the hearing.
The legal challenge centres on the provision of social rented housing in the proposed development by Delancey.
Of nearly 1,000 homes to be built in the scheme across the current sites of the Elephant & Castle Shopping Centre and London College of Communication, 116 will be for social rent – but these will be the last to be built, in around 10 years' time.
Campaigners also contend that Southwark Council's planning committee was misled as to the maximum amount of affordable housing the scheme could viably provide and that with City Hall funding there could be at least another 42 social rented homes.
More than £8,000 has been raised to support the legal challenge through a CrowdJustice appeal.
"We look forward to the case going to the Court of Appeal," said Jerry Flynn.
"Southwark is not getting as much social rented housing from Delancey as it should be, while the need for it has become even more acute. Delancey are not building the homes and new shops that local people need. Their planning permission should be quashed and homes and shops that local people can afford built instead."
In a statement, Delancey told us: "We were disappointed to receive the decision of the Court of Appeal allowing an appeal to be made against the decision of the High Court last December.
"However, we remain committed to delivering a new town centre and will continue to keep the community updated via our website, newsletter and regular community forum meetings."
The shopping centre closed its doors a month ago and the building is now being prepared for demolition.