It was apparently built to commemorate the 'conquest of the castle of Severndroog off the coast of Malabar' in the 1760s, and passed through many owners before being acquired by London County Council in 1922 and closed in 1986. During the Second World War, as it occupied the highest point between London and Paris, it was also manned 24/7 by observers, watching for air raids.
The Severndroog Castle Building Preservation Trust was formed in 2003 to save the Castle from being sold off to private developers, and became a charity in 2008. The charity aims to restore the castle and open it as a cafe and venue for educational visits, weddings and also install a viewing platform, to attract visitors and allow them to enjoy its views across London, where apparently seven different counties are visible on a clear day.
For more, see http://www.severndroogcastle.org.uk/