A giant dome erected for Sky One’s Got To Dance talent show, hosted by presenter Davina McCall, on Clapham Common was refused planning permission on Tuesday night.
Even so the dome, which cranes have already put in place, is still permitted to stay the rest of 28 days in total without planning approval.
Community groups said its construction raised concerns about legislation being flouted – and has reignited the debate about excessive commercial activity there.
The production company is being forced to rearrange its activities after an application to stay 36 days was refused on the grounds of design, size and cutting off common land to other users.
Auditions and filming for the show – which is looking for the next dance sensation – are due to start on Friday and free seats are advertised online.
During Tuesday night's meeting, Councillor Steve Bradley said: "I feel pretty powerless. I cannot see it coming down.
"Then we are told there may well be legal reasons this is not allowed to happen."
Coun Bradley asked why they were deciding on something due to begin eight days ago and requested clarification on permission only being required for more than 28 days.
He joked: "For 27 days I am going to a build a great big tent on Clapham Common."
He also expressed unease about commercialisation of park space and common land.
He said: "When you have commercial activities, when the council says thank you very much and pockets the cash, you are preventing resident amenities from some people in some of the space."
Councillor Brian Palmer said the design reminded him of the golfball-shaped domes of RAF Fylingdales missile early warning station in the North Yorkshire Moors.
Coun Palmer said: "That went up with special exemption because of the cold war. Now I don’t think that applies to Clapham Common."
A council spokesman said it had sought legal advice and saw no justification for the event not going ahead after it was granted event approval on August 31.
Kate Ashbrook, general secretary of the national conservation body Open Spaces Society (OSS), welcomed the refusal of planning permission.
Ms Ashbroook said: ‘We are delighted that the councillors rejected the advice of the officers.
"Now these hideous, surreal domes will have to be removed by Monday 1 October."
But consent should be sought under the Ministry of Housing and Local Government (Greater London Parks and Open Spaces) Act 1967 that protects London commons from encroachment, she added.
Melanie Oxley, chairman of the Friends of Clapham Common, said it was outrageous that construction was allowed before the planning meeting.
She said: "Commercial filming is not permitted on Clapham Common and Lambeth knows this.
"The OSS and ourselves are taking extremely seriously how Lambeth appears to be flouting the law as it applies to common land, simply because it is aiming to meet financial income targets."
Anna Jefferson Smith, from the Clapham Society, said: "It’s a totally inappropriate use of common land to have a TV studio, which is blacked out inside and carpeted. The grass will be dead."
Fred Uhde, who can see the domes from his bedroom window, also raised concerns about the noise and setting a precedent for the future.
He said: "I am very please the councillors did the right thing. It’s a step in the right direction."
The dome controversy comes on the heels of outcry following a structure put up by Nike.
The Nike+ FuelStation, which lets people to try on trainers and design footwear on terminals, was due to be a temporary structure, but has applied to extend its stay until May 31 next year.
Councillor Jeremy Clyne said: "It is very worrying the council seems to just be using the common to make money."
Lambeth Council said it would receive £136,100 for the Nike installation and £62,000 for the dance contest installations – both sums including deposits to repair damage and money to reinvest into the common.
A council spokesman said: "Events like this help to raise vital revenue for council services at a time of severe government cuts to our budget.
"Part of the fee that gets paid to the council for use of the Common is spent directly on improving parks facilities across the borough.
"We also secure a deposit from event organisers to make sure any damage caused to the Common is made good.
"We think it makes sense to attract external investment in our parks, and events like these provide a major boost to local businesses.
"Local people can also apply for free tickets for the event."
Last year, community groups were outraged when Camp Royale – a three-day camping festival for the royal wedding – was given permission.
More than 600 audiences members are expected to come to the domes each day of filming stretched over 16 days.