A controversial plan to build hundreds of new homes on farmland in Poole has been rejected by Communities Secretary Eric Pickles.
Protesters have argued the proposals for 378 homes and student accommodation on farmland at Talbot Heath, Dorset, would be environmentally damaging.
However backers of the scheme said it would have provided 132 "much needed" affordable family homes.
The decision follows a three-month inquiry which ended in October 2011.
Poole Borough Council voted in favour of the plans in June 2010.
The Talbot Village Trust, the body behind the residential development, says it is "considering its options" and may appeal against the decision.
"We are very disappointed with the outcome because we believe this project would bring many benefits to the area with the added bonus of any profits realised being ploughed back into the community," said trustee James Gibson Fleming.
The trust says it would have invested £1m in local schools had the development gone ahead and subsidised bus services as part of a "green travel plan" to encourage the use of public transport.
Local resident and campaigner Veronica Trevett said she was "delighted".
"This outcome justifies our objections to the approval of the planning application by full council, which we felt was totally wrong.
"All the objections of residents and residents' groups had not been taken into consideration," she said.