Merton Council has failed in its bid to buy a piece of land hoped to be transformed into a community space.
The 0.53 acre site at the end of Rookwood Avenue, New Malden was owned by the Royal Borough of Kingston and had been listed for sale with a starting price of £20,000 at an auction held on July 31.
The council were outbid for the scrubland which is believed to have been sold for £131,000 to a man rumoured to have plans to use it to extend his business by using it as a car park or garage.
Conservative councillor Gilli Lewis Lavender, for West Barnes, said: "I had great plans for it in terms of allotments and gardens and amenity space for residents - all sorts of wonderful plans, so it is a great shame.
"Merton would have been foolish to pay over the commercial value."
A spokesman from Kingston Council said the name of the buyer could not be released until the deal had gone through, expected to be completed yesterday.
He said he did not know who had cut the trees down but that it was not Kingston Council.
The land is subject to a covenant which means it cannot be built on or have any concrete on it without the covenant being lifted.
Coun Lavender said: "Quite clearly they will need planning permission if they wanted to build on it.
"The council could fight tooth and nail along with me because it is an amenity space."
Liberal Democrat councillor Mary-Jane Jeanes, said: "This land is designated as an open space and as a green corridor, so it should not built on.
"For about forty years, people have used the path across this land from Rookwood Avenue to the footbridge over the Beverly Brook, which leads to Blagdon Rd.
"Councillors Iain Dysart and I have asked Merton Council to designate this path as a public right of way. "
A spokesperson for Merton Council said they were investigating the sudden deforestation of the site and that if any of the trees had been cut down it would be taking enforcement action.