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So fiery is this new building that it blazes out at you from a side street in south-east London. Its sheer facade is bright orange or, more precisely, it is clad in vertical timber boarding that graduates from canary yellow at one end to vermillion at the other.

The vivid new building certainly outshines the one facing it across the street. This is a long Soviet-style grey-slab block, bounded on each floor by straight, access decks with repetitive steel railings. Yet the same local council is responsible for both. Indeed, they are more intimately linked than that, as the stripey orange block has been built to replace the grey concrete one.

The new housing scheme is the competition-winning design of young-blood local architect, de Rijke Marsh Morgan. Being fresh, modern and vibrant, dRMM鈥檚 building is visibly a reaction to the 1960s council estate, in form and appearance.

It stands within a few blocks of the bright pink Elephant & Castle shopping centre, and is the frontrunner in the 拢1.5bn regeneration of the whole 425 ha area planned by Southwark council. It is also the trailblazer of 16 infill housing schemes that are planned by Southwark to replace the monotonous slab block and all its clones, which have made the 1212-dwelling Heygate estate a byword for oppressive system-built public housing.

The new housing is a reaction to the grey 1960s slab block it faces and will replace. Its vivid colouring is graduated along the facade to match its neighbours on either side

The new block contains 31 flats for sale, rent and shared ownership, and these are packed into the site at the density of 1100 habitable rooms a hectare. Southwark provided the land, drew up the design brief, set up the competition, and offered the flats to its existing tenants. But it did not actually develop the scheme itself. That is no longer government policy. It selected Southern Housing Group to do the honours instead.

Take a closer look at the orange facade and it turns out to be less outrageous than at first glance. The yellow end blends with the adjoining Victorian terrace, which is in buff-coloured London stock, whereas the vermillion end matches the red brickwork of the former town hall. The street facade aligns with those on either side and it steps up from four storeys next to the three-storey terrace to six storeys next to the grand town hall. The building disguises its height by being submerged half a floor below the pavement, just like the terrace housing next door.

The elongated building also turns out to be subdivided into four blocks by narrow open passageways, with stairs leading to the upper flats. Because they are lined in concrete blockwork, the passageways are on the bleak side, but dRMM director Philip Marsh says: 鈥淲e were asked for something very different from anonymous deck access, so we provided these localised access points where you can get to know your neighbours.鈥�

The stairwells lead to a communal rear garden, which stretches the full width of the block to the same depth as those of the neighbouring terrace houses. The garden will be planted with shrubs and creepers climbing the rear fence. It also contains a large cycle storage area beneath a glazed canopy, with one rack for each flat, as the council stipulated that this should be a car-free development.

The 1960s slab block will eventually be replaced by a landscaped square and the stainless-steel Faraday Memorial.

The real surprise at the back, however, is the rear elevation of the housing block. Whereas the street frontage is flat and colourful, the rear elevation is deeply modelled and monochrome. The rear facade is entirely glazed, with deep balconies projecting from every floor, and beyond these, a screen of large white horizontal louvres. Where the street frontage is colourful but reticent, the rich modelling and extensive glazing of the rear elevation expresses the three key features of the dwellings inside. These features concern the mix of dwellings, their unusual configuration and the character of their interiors.

Not only do the smaller flats come without external louvres, but their rear facades are set back behind those flats with louvres. All the flats have balconies but in several depths. This varied treatment of the rear elevation reflects the diversity of sizes of the flats inside, which have between one and three bedrooms. 鈥淚t also gives identity to the dwellings, which is vital to housing schemes and was completely absent in the Heygate blocks,鈥� adds Marsh.

What the articulation does not indicate is the mix of tenures. There are 12 flats for social rent, seven for shared ownership and 12 for private sale, all of which have been 鈥減epperpotted鈥� 鈥� or mixed together 鈥� throughout the scheme in an egalitarian manner. More than that, says Marsh, there is no difference in either space standards or specification between the tenures. Apart, that is, from a rich, cherry veneer facing to the internal doors of the flats for sale.

The large stepping gap in the louvred screen is also an expression of the ingenious interlocking configuration of the flats. All 31 stretch right through the blocks, either from front to back, as in the adjoining terrace houses, or from side to side in the deeper block adjoining the former town hall. But unlike the terrace houses, all the flats are accessed from the open stairwells along their side. These two spatial arrangements combine to leave the main front and rear walls free for habitable rooms with windows.

But this arrangement also made it tricky to fit in the different flat sizes. As shown in the diagram above, dRMM鈥檚 solution was to interlock the flats in both plan and section over two floors. The largest flats have their third bedroom placed either above or below the main body of the flat. The small single-bedroom flats have then been wrapped around the upstand and downstand third bedrooms of the large flats.

Each flat comes with a full-width, south-facing window wall, balcony and adjustable louvres to control sunlight and privacy.

As for the glazed rear facade, this comes into its own inside the flats. In each, the living/dining room stretches the full width of this wall of glass, which faces south towards the sun and the communal garden. A sliding patio door gives access to the balcony, where residents can swivel the louvres to control the amount of sunlight admitted. This open-plan living/dining room is spacious and L-shaped, as it makes habitable use of the circulation zone in the heart of the flat that otherwise would have been wasted on an internal corridor.

鈥淚t鈥檚 a bit like my own Span house in Greenwich,鈥� comments Marsh, referring to the legendary open-plan dwellings designed by Eric Lyons in the 1960s. 鈥淚t has a compact plan but an expansive view.鈥�

Despite its stark street frontage, the Wansey Street development has gone down well with local home seekers, although Marsh admits that the older tenants did not warm to the open-plan areas. Heygate resident, Paolo Laccini, who has reserved a flat for rent says: 鈥淚t looks semi-industrial on the outside. But inside, there鈥檚 lots of light. I like the lovely open space for living and dining.鈥�

The 12 flats for sale range in price from 拢185,000 to 拢325,000 and, even before completion, all but one have been reserved, with roughly a third taken by council tenants. Likewise, six out of seven shared-ownership flats have been reserved, with a similar proportion by council tenants. As for the 12 flats for rent, these have all been taken up by Heygate residents.

Looking to the future, when the grey Heygate block is demolished, Make has sketched out a proposal for a landscaped public square. On the site of the Heygate block, the enigmatic stainless steel Faraday Memorial box will be relocated from the Elephant & Castle roundabout. The former town hall is to be converted into a museum, if a grant allocation from the Heritage Lottery Fund materialises.

Wansey Street sets a new model for inner-city mixed-tenure housing design. As well as being fresh, contemporary and exciting, it is eminently habitable, sustainable, and durable.