Affordable homes will not be included in plans to redevelop a former prison in Dorset, a council has said.
Owner and developer City and Country wants to build 189 homes and a museum at the 1.95 hectare (4.8 acre) site of the former HMP Dorchester.
West Dorset District Council said it was not financially viable to include affordable housing on the site.
The district council's local plan requires each new housing development to include 35% affordable housing.
However, the authority said the policy was subject to a test of financial viability.
It said the process had been "rigorously conducted" at the prison site between Glyde Path Road and Friary Hill, and assessors had concluded "that due to the high costs associated with developing this congested brown field site in a conservation area, the scheme cannot financially support any affordable housing".
Councillor Tim Yarker, housing portfolio holder for West Dorset District Council, expressed his "deep disappointment" at the outcome but added he was satisfied the assessment had been "meticulously conducted".
Richard Winsborough, associate director for planning at City and Country said the firm's "main priority" was to find "a viable new use whilst ensuring the full and apposite restoration of this nationally important heritage asset".
He said the restoration, which had been supported by members of the public during the consultation period, would "run into the tens of millions of pounds".
Mayor of Dorchester Tim Harries said he was "extremely disappointed" by the news.
He said there was a "distinct lack" of affordable housing in Dorchester, adding: "Where are first time buyers going to be able to buy or rent houses in an affordable fashion?"
Mr Yarker said the district council would "work hard to bring other much-needed affordable housing schemes forward".
A number of public executions, including that of Martha Brown, the last woman to be publicly hanged in Dorset in 1856, took place at the site.
Archaeologists plan to exhume human remains at the site before the planned redevelopment can go ahead, but a date for this is yet to be set.