Plans for 60 new Carnoustie homes on the north east edge of the town’s development boundary have been blocked at appeal.
In March, Angus Council refused Kirkwood Homes and Angus Estates’ £15 million bid for the greenfield site at Panbride Road.
The application split the community with more than half of 115 letters of representation in favour of the development.
But councillors backed the refusal recommendation of officials for the policy-busting proposal.
The companies appealed the ruling.
At the time they expressed confidence the decision would be overturned.
Kirkwood Homes said hundreds of potential buyers had registered an interest, many of them looking for a first home.
And they hoped to be building on the site by 2023.
But now a Scottish Government reporter has backed the council by rejecting the appeal.
Reporter David Buylla made a site visit to see the farmland the firms hoped to develop.
His appeal findings say Angus councillors made the right decision.
“Although the site lies immediately adjacent to the edge of Carnoustie, it is outside the settlement boundary and therefore in a countryside location,” he said.
Local planning policy only allows residential development in limited circumstances for such situations.
And none applied to the Panbride Road site.
The applicants argued there was a desperate need for new housing in Carnoustie.
Mr Buylla added: “The appellant describes the South Angus housing market sub-area (HSMA) as dysfunctional and unbalanced due to there being a particular shortage of effective housing land within Carnoustie.”
Kirkwood Homes argued the majority of planned development is in Monifieth.
But the reporter highlighted a site at Pitskelly on the other side of the town where development is underway.
It has permission for nearly 250 homes and 75 of those are due to be built in the next year.
“This does not suggest that any revision is required to my earlier conclusions on the adequacy of the effective housing land supply,” the reporter said.
“As this proposal would involve residential development on prime agricultural land with housing for which no justification has been proven, it cannot be considered to be in the public interest, even if it could be demonstrated that there were no alternative sites within the settlement boundary,” said Mr Buylla.
“The proposal would not contribute to sustainable development.”
And he delivered another blow to Kirkwood’s ambitions by criticising the design of the development.
“Had I been minded to allow this appeal, it would have been necessary for me to
consider the detailed design of the proposals.
“As I find the principle of development to be unacceptable, a consideration of such matters would be unproductive.
“However, I share the council’s concern over the proposed layout of the site, which would turn its back on adjacent roads.”