In 2003, Prince Charles visited the teeming lanes of Dharavi in Mumbai and, according to remarks he made this week, he was impressed at the intuitive "grammar of design" in Asia's largest slum. From my own experiences in the slum last year, making programmes for BBC Radio 4, I'd say many of the slum's residents would agree with him – but only up to a point.

I remember very clearly how the atmosphere changed when Raju Korde took me into his chawl. He is a left-leaning slum politician, born in Dharavi's lanes. I was appalled by the stench, filth and dense humanity of the slum on my first day. As my guide, Korde wanted to show me where he lived – his chawl – which he said was an example of redevelopment done well.

On our way there, we picked our way through piles of rubbish, open sewers and sub-standard shanty homes packed so tightly they cut off the light. But then we turned through a gate and – as if by magic – the noisy clamour and fetid stench faded away.

The chawl represents a vision of the future that I think both the Prince and Dharavi's poor would support. Rather than building vertically, the architects of this scheme have recreated ground-level slum dwellings. But unlike the sprawl that dominates the rest of Dharavi, these were well-built, planned homes of two rooms and an indoor toilet, arranged around a clean courtyard centred on a banyan tree.

The residents here could continue to work from their ground-level dwellings – the stitching, processing, weaving that allow the slum to be a place where the poor can work their way out of poverty. The chawl retained the old sense of community lost to people rehoused in multistory blocks.

It's an older vision of redevelopment: this chawl was built over 30 years ago. But when I asked Korde whether he would want all of Dharavi to be re-made this way, his answer surprised me.

"No," he said, "of course, we don't want redevelopment like this. We don't want to ask for what's not possible."

In fact, Korde and others in the Dharavi Bachao Andolan, the coalition fighting the current private sector redevelopment plan, are not fighting the creation of tower blocks per se. They just want bigger flats and more public space in those blocks.

Their reasons for taking this stance are purely practical. While the private-sector plan involves tower blocks being built by companies, the reality is that government-funded schemes and even some in India's NGO sector are building tower blocks as a solution to the slum problem.

The tower block appeals because, in the end, Mumbai's problem is one of space. Redeveloping Dharavi in the fashion of Raju's chawl takes up lots of it and, ultimately, everyone – government and private sector – wants to reclaim the vast swathe of the city currently taken up by the 60% of Mumbaikars living in slums.

That may be wrong, but it's an attitude that doesn't show any sign of changing fast. So Korde and his fellow residents have made a compromise. And this is what separates them from Prince Charles' more idealistic view.

The Prince, of course, is in a position to take bold and often laudable stands – such as his campaign to save the hutongs of Beijing. The hope is that such intervention opens up a space for pause and reflection for the leaders of development-obsessed Asia.

But the surging political and economic pressures of India and China mean the poor themselves don't have the same luxury. As Raju Korde puts it: "Agitation without an alternative is baseless. Agitation with an alternative is worthwhile."