Developers who have spent half a billion dollars buying suburban blocks on Sydney's lower north shore have been dealt a blow, after an independent panel found plans to build high-rise apartments at the site were at odds with the area's character and amounted to "overdevelopment".

Over the past seven years, developers have spent hundreds of millions of dollars acquiring about 90 suburban lots to the south of St Leonards station and the Pacific Highway, in anticipation those lots would be rezoned for a "St Leonards South" residential precinct put forward by Lane Cove Council.

An artist's image of the proposed St Leonards South precinct. Credit:Department of Planning

Residents have been angered by the proposal, which would lead to the construction of about 2400 apartments in towers up to 19 storeys high spread across five streets.

Among the criticisms levelled at the scheme, which has been supported by the council as a way of delivering housing demanded by the state government, are concerns that it includes little open space, is poorly designed, and would over-stretch inadequate transport and social infrastructure.