Artists, craftspeople and fashion designers in one of London’s largest remaining studio colonies are fighting plans to bulldoze their premises and replace them with almost 1,400 mostly luxury apartments.

In a new frontline in the battle against the capital’s gentrification, housing giant Berkeley Homes has applied for planning permission to demolish studios on a former gas works site in Fulham in southwest London, which is currently used by more than 200 businesses in the creative industries.

Tenants opposed to what they describe as a Dubai-style development of blocks rising to 27 storeys include one of the Duchess of Cambridge’s favourite fashion designers, Pepa Gonzalez, who has made clothes for Prince George and Princess Charlotte; and Julius Schoonhoven, a leading clockmaker who works for the National Trust and the Royal Palaces.

The affected businesses include fine artists, architects and designers and have a combined multi-million pound turnover.

The dispute is set to test a manifesto promise made in May by London mayor Sadiq Khan to “protect London’s workspaces and venues threatened by encroaching development”. The plans are set to go before the London Borough of Hammersmith and Fulham’s planning committee in the coming months and Khan’s spokesman said it would “inappropriate to comment while this is still a live case”.

The threat to the studios is not an isolated case. Between 2014 and 2019, 3,500 artists were predicted to lose their places of work in London – a 30% cut, according to a report by the Greater London Authority.

The temptation to replace them with private housing is strong for developers. The artists pay as little as £500 a month in rent, but Berkeley Homes is currently selling three bedroom apartments for £6m at a neighbouring site, Chelsea Creek.

The housebuilder’s founder and chairman, Tony Pidgley, earned £21.5m last year.

But on a visit by the Guardian this week, the tenants argued they form a vital part of London’s creative industries sector, which provides one in eight jobs in London.

Fashion designers described how they manufacture clothes in other parts of the capital while fine art and furniture restorers said they worked for Sotheby’s and major galleries. They are likely to face eviction next year.

Pepa Gonzalez, a Spanish fashion designer in her studio at The Old Gas Works. Photograph: Alicia Canter/The Guardian

“We are skilled artisans, gilders, clockmakers and proper creative industries,” said Francesca Sanders, a wildlife artist and part of the Old Gasworks creative enterprise committee opposing the housing scheme. “We are not a load of school kids.”

However, Berkeley said its plans would bring a site largely occupied by redundant gasholders back into use and provide “much needed homes for London”.

The tenants’ committee has complained to Berkeley, which is proposing the redevelopment in a joint venture with National Grid, that its demolition plans are “baffling”. They say they have been offered no alternative accommodation.

“The array of British heritage brands and crafts housed here are not only a vital asset to the neighbourhood and London more broadly, but also a very obvious goldmine for any future development,” they wrote in a letter also sent to the Prince of Wales, whose support they are hoping to win for their campaign. At least two of the threatened tenants are backed by the Prince’s Trust.

“This is awful,” said Gonzalez, originally from Spain, whose business started booming recently when Prince George was pictured on the cover of Hello! Magazine wearing one of her outfits. “We need places like this to help London grow. One person will get rich by selling all these apartments but what happens to everybody here? This place is full of expertise. There are painters, photographers, clothes from Africa, Spain. This is London. It is the whole world.”

Julius Schoonhoven, an antique clock fixer, in The Old Gas Works. Photograph: Alicia Canter/The Guardian

“We are trying to convince them to keep us as part of the development because this could be a huge asset,” said Johnny de Ath, a musician and composer who has been based at the complex for 12 years. “Once you have the arts scene, the rest follows. If this doing and making is all pushed out we have a big problem for the creative industries in this city.”

A spokesman for St William, the name of the joint venture company, said: “We are in touch with local businesses as part of our engagement with the local community regarding the proposals to redevelop Fulham Gasworks. We have submitted a planning application for up to 1,375 1, 2, 3 and 4 bedroom homes, 103,000 sq ft of commercial space, including the refurbishment of two listed buildings and a new public park providing 2.5 acres of open public space.”

He said the site was “extremely complex” because of the gas infrastructure and said it had to balance competing requirements including affordable housing and the restoration of some listed buildings.

Last month, City Hall planners warned the project does not yet comply with some London-wide planning policies. They called on St William to commit to providing replacement cultural and employment uses including affordable workspace and complained there was no affordable housing offer which was “a significant concern”.

St William said it has submitted a viability assessment regarding affordable housing, although this remains confidential. It also said the application included space that could be used for small businesses and galleries.

The Old Gas Works in Chelsea, London, which Berkeley Homes wants to redevelop. Photograph: Alicia Canter/The Guardian

But the current tenants will be moved out and they believe the vitality of their complex will not be replicated anywhere else.

“These types of places – workspaces where you physically create things, not offices – are dying out,” said Schoonhoven as he repaired a 340-year old clock for the National Trust. “This is one of the last of its kind. Yes we need housing, but the sort of housing being built here isn’t what we need. This is investment housing.”

Ekaterina Kukhareva, a Ukraine-born knitwear designer and maker who exports evening wear to Saudi Arabia and Dubai using a specialised loom, said if the premises were demolished “100% I won’t be able to find anywhere else and I’ll be leaving the UK.”

Elizabeth Eldimaa, a fashion designer being supported by the Prince’s Trust who imports fabrics from Nigeria and Ghana and uses them in European designs, said the demolition of the studios would force her back to working alone in her one-bedroom flat, where as a single mother she brings up a five-year-old daughter.

“The community here is amazing,” she said. “There are babywear designers, interior designers and it keeps you motivated. I can’t afford to go anywhere else.”