However, a motion to urge Planning Minister Matthew Guy to downgrade the status of the Mountain Gate activity centre in the Melbourne 2030 strategic planning framework was defeated at a meeting last week.

Mountain Gate - which has the shopping centre in Ferntree Gully road as its heart - is one of four major activity centres in Knox earmarked for housing and business development in the Melbourne 2030 strategy.

Cr Darren Pearce proposed the move to have the area downgraded to a neighbourhood activity centre.

"There's no heavy rail there, it's reliant on buses. I don't believe it should be classed as a major activity centre at all," he said. "It certainly doesn't have the potential of somewhere like Stud Park."

Cr Joe Cossari argued in favour of leaving the area as a major activity centre. "If we change it or downgrade it, it'll become a dead area and have less investment," he said.

Mountain Gate Business Association vice-president Ray Abley said the decision to abandon the structure plan was a good result for the area.

"The residents are happy, so the traders are happy. The plan was not respectful of the neighbourhood, and this decision will help stop inappropriate development."

He had no issue with developers constructing three units on one block in Ferntree Gully, but said there were strong community objections to three and four-storey buildings.

Mr Abley, who runs a real estate agency in the shopping centre, disagreed with Cr Pearce's proposal.

"It's not near a railway station, but it's a huge centre," he said. "It's only going to grow, so how are you going to downgrade somewhere that's going to increase?"