The permit issued by the development control commission to demolish the façade of Palazzo Fremaux, in Zejtun was valid, according to investigations carried out by the Malta Environment and Planning Authority.
MEPA said the commission had, therefore, acted within the parameters of the law.
MEPA was referring to the comments of Fondazzjoni Wirt Artna and Zejtun council, which have criticised Monday's demolition of the façade of the palazzo, used as a hospital under French rule.
FWA has expressed "disgust" at the demolition and the local council said it was holding MEPA responsible for the destruction of the scheduled villa.
According to the 1990 Planning Act, the property was listed as a grade 2 building, meaning its façade had to be kept intact.
Outlining the permit history of the building, MEPA said permits were issued in 1993 and 1998, binding the developer to retain the façade.
In 2000, the commission had been requested to make amendments to an approved permit so that the remaining façade would be demolished in order to provide accessibility to the 37 garages and 24 apartments developed on the land once occupied by the villa and its garden.
Access to the development was through a small road in the villa's original façade.
Following advice from the Museums Department and after taking into account the facts, the commission had unanimously concluded that "the spirit of the listing of the villa had been lost" and had approved the application to demolish the façade.
While appreciating the concerns of the local council and FWA, MEPA said the difficulties that certain development decisions brought with them also had to be considered, particularly in such situations, where easy solutions were not readily available.