A Tesco supermarket topped with hundreds of apartments and wrapped in striped metal cladding has been named Britain's worst new building. The ignominious gong, known as the Carbuncle Cup, has been awarded to the Woolwich development, in south-east London, for a design the judges have dubbed "oppressive, defensive, arrogant and inept".

The prize is organised by the architecture website Building Design, and aims to pick out buildings that are "unforgivably bad and deserve to be named and shamed". The judges included Owen Luder, former president of the Royal Institute of British Architects, and Prince Charles's architectural adviser, Hank Dittmar.

The store, known as Woolwich Central, was chosen from a shortlist of six properties nominated by readers, which included the 50-storey Vauxhall Tower by the architects Broadway Malyan, the chancellor's building at the University of Bath, and a block for student accommodation firm Unite near the Olympic Park at Stratford, east London, which was so unappealing to one reader that he suggested "we take off and nuke it from orbit".

Tesco made the shortlist with another development, Trinity Square shopping centre in Gateshead, which was built on the former site of a car park famous for its appearance in the Michael Caine film Get Carter. The car park's architect, Owen Luder, happened to be also a Carbuncle Cup judge. He said: "The first principle of demolition should be to put up something that was better than was there before. Whatever you thought of the car park, this project is much worse."

It is the second time the London borough of Greenwich has had to endure the opprobrium of the Carbuncle Cup for its attempts at modern architecture. The borough is home to the Old Naval College, a three centuries old masterpiece by Sir Christopher Wren, but the quality is clearly not rubbing off.

In 2012 the Carbuncle Cup was awarded to the Cutty Sark renovation, designed by Nick Grimshaw, which one judge said "tragically defiled the very thing it sets out to save".

In their citation for Woolwich Central, the judges said: "Woolwich might have thought that its days as a military outpost were over. Wrong. Somehow what looks like the world's largest shooting range gained planning permission right in the middle of the town centre, presumably after masquerading as housing above a Tesco supermarket.

"Camouflage comes in the way of some truly diabolical cladding and a massing strategy that seems to have been directly inspired by the 1948 Berlin blockade; we can only hope that residential leases come with free airlift."

Dittmar said the Woolwich scheme was "too much for the site, for the area and for the eye". He said the architects, Sheppard Robson, had "compounded the problem with strident cladding, long blank street facades and cheap illegible entrances".

A spokesman for the architects, defended the project saying "the aim was to create a cohesive piece of strong architecture that unlocked this vast space and established a desirable place to live". The firm said the flats had sold quickly and said 30% of the units were affordable homes and 60% of the remaining ones had been sold to first-time buyers.

"We visited the development recently and the comments received were very positive, with many residents enjoying their apartments as well as the large garden spaces at the heart of the development," the spokesperson said.

Even Alex Grant, chairman of Greenwich council's planning board when the building was granted planning consent, admitted: "It is a flawed project and I regret my role as its midwife. No matter how you dress it up, Woolwich Central is a huge two-storey car park with a supermarket above and some flats on top: a type of development completely alien to London town centres like Woolwich and one which struggles to integrate well."

A spokesman for Spenhill, Tesco's development arm, said: "We worked and consulted with local communities at Woolwich and Trinity Square and both developments have had a positive effect. We've created more than 1,000 jobs and built much-needed homes in an area of London untouched by investment for many years, while three million people have visited Trinity Square in its first year."