Merton has joined a growing coalition of councils in opposing a three-year planning "free for all" amid fears it would pit residents against each other.
The Government has put forward proposals to relax planning regulations to allow larger home and business extensions without planning permission in a bid to boost the economy.
However councils, including Lambeth, Richmond, Sutton, and now Merton, have said they will not abide by the proposals.
Stephen Alambritis, leader of Merton Council, said: "I am appalled at this suggestion of a planning free for all.
"We will see what we can do as a council to place a motion at the next council meeting to get agreement to oppose this way of doing things.
"It would set residents against residents and it would destroy the settled planning regulations that we have.”
Homeowners are currently allowed to build a single-storey 10ft extension if they live in a terraced property and one of 13ft if they live in a detached house.
If the proposals become law the limits would be doubled to 20ft and 26ft for three years, in an attempt to boost the economy.
While business premises would be able to expand by 100sq metres and industrial units by 200sq metres while offices would be permitted to convert to residential use without planning permission, regardless of the impact they will have on a neighbourhood.
Local councils have the right to ignore national planning guidance under a rule called article four - however they are supposed to give a year's notice.
Coun Alambritis said: "What [Eric Pickles, Communities Secretary] is going to try and do is push it through in a year.
"Our planning applications are already down by half because people don’t know whether they are coming or going."
Should councils' ignore the relaxed planning proposals and refuse planning permission, Eric Pickles has said residents would be within their right to "seek damages" against their council.