By Robert Carry

Melbourne councils have blocked a second major residential project in the city's middle-ring suburbs, it has been revealed.

According to the Australian Financial Review, Stonnington City Council refused an application by developer Stockland to build a 35-storey apartment building in part of South Yarra designated as a principal activity zone. The council's decision was then upheld by the Victorian Civil and Administrative Tribunal (VCAT).

Stonnington mayor Claude Ullin criticised the VCAT saying they come up with some "very surprising decisions". He added, "It often depends which [VCAT] member you get... We're always puzzled about how VCAT works." A review of the body is currently underway and a report is due by year-end.

Meanwhile, development company Hamton's proposed building of a 520-unit Circa project has stalled after Moreland City Council challenged the plans.

The group is understood to be seeking ministerial assistance in a bid to secure a green light for the development in the north of the city.