Hi, im no expert on this but do have some knowledge on this matter. However its only my opinion and it would be best to speak to your local council who ive no doubt will be more than helpful.
Building off your grans walls i think would depend on if the full street was terraced houses, or detached/ semi detached. Any new buildings have to be in keeping with the rest of the street. Theres no way the can build on your grans property or over her boundary line without permission. After all its her land. Approval for these plans at your councils planning department should pick up on this. In my opinion they would have to build away from your grans wall although im not 100% on how far away that would be. If the propose property is too be built directly next to your grans and its all approved by the council etc...make sure you get an indemnity certifiicate of insurance from the people/ builder. This should provide cover incase there digging of foundations for the new house effects your grans place. Digging close to someone elses foundations could effect your grans foundations, even in years to come.
They cant just take down your grans house wall without permission and approval. As far as it goes for coming onto you grans land to build a new house they would need to agree with your gran what and when they intend to access her land and also on what. You dont want heavy trucks or machinery putting extra weight on your grans driveway? the extra weight could break up the drive/ground/path etc. If you want to be akward i think its fair to say you will allow the access pass over your grans land at certain times of the day unless they compensate you for the inconvenience of it all.
Hope this helps, im sure they will be other people on this site hwo can comment further.....you must speak with your councils planning department for legally binding advice. Cheers Dude...let me know how you get on!
Thinking on this a bit more, bit of an obvious one but have you searched the net for free advice?....just google what you worries are and im sure you will find a site which will give you more information. If you have objections to the build then you need to get in touch with planning department asap to express your objections and concerns....Even if all does go ahead it could be quite lucrative for your gran, by charging them an annual access fee if they need to get onto your grans land to get to the newly built house. Without knowing all the information its difficult to comment acurately. My concern would be if access over your grans land to the new house was to go ahead this would effect the re-sale of your grans place and would put potential buyers off. Be interesting to know what happens here. You will have to let us know how you get on. Try a goggle search for 'party wall agreement' this will give you more info on where and how they can build.
The wall is an issue that will need to be resolved under the Party Wall etc Act 1996. If you see works commencing without any notices having been served, speak to a local surveyor. If it is a boundary wall there are procedures under the act to cover this. For example, if the builders wish to enclose upon a wall which is not a party wall, they will need your Grans agreement and a Party Wall Award could see your Gran received 50% of the cost that the developers would have had to shell out to build the wall.
With regards to keeping 1m away, this is not a requirement as long as the end wall is fully fire retardant.
The land issue is a different matter. Your Gran should have been served notice when the plans were put in for planning if the scheme involves any land not owned by the developers. She is not required to hand over any land for a shared access unless there is a covenant ont he proeprty or it is within the deeds etc.
There is an act called the Access to Adjoining Land Act (1992 I think). This covers accessing an adjoining owners property to maintain a property, but not to build. If they propose to erect a scaffold on your Grans land, she can charge them for a scaffold licence (to rent the land to place scaffold upon essentially).
Basically contact a local Chartered Building Surveyor, familiar with the Party Wall etc Act 1996. In most circumstances his fees will be paid by the adjoining owner, but worth paying for a professional opinion with the benefit of seeing the drawings.