M&S challenged the Government in the High Court over its "unusual" decision to block the plans.
Barristers for the retailer told a hearing in London last month that Levelling Up Secretary Michael Gove had "misunderstood and misapplied" national planning policy.
The Government, supported by Save campaign group Britain's Heritage, said Mr Gove was entitled to make the decision.
In July he stated there was no "compelling justification" for demolition over refurbishment and that flat the building tening would harm nearby heritage assets like Grade II*listed Selfridges.
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