Authorities are dropping height restrictions for buildings on a key plot of the Port Melbourne waterfront, following a big push by a Kuwaiti-backed construction company.

The Victorian Civil and Administrative Tribunal (VCAT) made the change in order to give green light to plans for apartment towers between five and 19 storeys in height at Waterfront Place.

It means long-standing covenants - which serve as a legally binding contracts on a land title document – will no longer be used to block alterations to Waterfront place that would have “hurt the area's amenity”, as they were originally intended.

The Port of Melbourne Corporation and local residents have made complaints that the proposed high-rise developments will be inconsistent with the character of the surrounding neighbourhood, citing risks that the big buildings will overshadow the popular foreshore area.

But community voices could not stand up to the might of Action Group Australia, a building company owned by billionaire Kuwaiti sheikh Mubarak Abdullah Al-Mubarak Al-Sabah.

The builders have been planning to construct a residential and retail hub in the area for nearly six years.

VCAT says it became involved in the dispute between Action Group and local opponents because of “neglect, bureaucratic obfuscation, polarised planning attitudes, economic factors and physical depredation” of buildings currently on the site.

The planning body found that the development would not compromise the area's amenity, but has also given rival developer Mirvac the right to block any developments that were not of the same basic character and scale of buildings already on the site.

Action Group Australia has managed to secure the support of Port Phillip Council (despite the numerous disgruntled residents), which could amend the planning scheme to place a height limit of 10 storeys on developments.

VCAT's green light is still could still be dimmed by the recently-elected Labor government, which stated prior to assuming office that it would support the position of Port Philip Council.