A public inquiry will be launched to determine the fate of The Stew after a planning inspector called for a full investigation of the case.
A decision was expected to be made on the future of the landmark building this month after an appeal was lodged by landowner Gareth Leese.
Mr Leese had hoped to demolish the building and build a £1.65 million, 25-bedroom hotel in its place, and had launched the appeal after borough councillors rejected the proposals in March last year.
But following a site visit on January 23, officials at the Government’s Planning Inspectorate based in Bristol have told Shrewsbury and Atcham Borough Council planning officers to launch a public inquiry for a full investigation of the facts.
Campaigners in Frankwell have previously fought to protect the building from development, while a four-day public inquiry held last autumn saw Frankwell Quay Warehouse, also known as the Maltings, saved from development.
A letter from the Planning Inspectorate to Shrewsbury and Atcham Borough Council’s planning department stated: “It has been decided after examination of the proposals that the appeal cannot be determined by a written procedure.
“It’s considered that the inspector can only be made fully aware of all the facts by holding an inquiry.”
A spokesperson for the borough council’s planning department said all parties would be notified by February 28 and that all outlining statements would need to be submitted to the inspector by March 27, although no timetable had been set for when the inquiry would take place.
She said: “We received a letter last Friday from the Planning Inspectorate saying the written correspondence between the parties was not an adequate way to determine the appeal.
“Now we are completely restarting the whole process and are putting procedures in place for a public inquiry.”
Mr Leese was unavailable for comment as the Chronicle went to press.