A proposed 127-housing unit development next to Camp Road in Freshwater was rejected by the Isle of Wight Council yesterday.
Seven members of County Hall's Planning Committee voted to refuse permission for Tallulah Estates Ltd's proposal - a heavily criticised plan recommended for refusal by a council report prior to the meeting.
The reasons included significant effects from surface water drainage on the Solent and Southampton Water Special Protection Area, Solent Maritime Special Area of Conservation and the Freshwater Marshes and Yarmouth Estuary Sites of Special Scientific Interest.
There also was insufficient information in respect of bat surveys.
None of the 13-member committee voted in favour of the application which included 35 per cent affordable housing and a new vehicle and pedestrian access.
Cllr Matthew Price, representative for Fairlee and Whippingham, said: "It's not a really small piece of farmland. While it's not significant in its size, it's significant when you attach it to other areas of farmland in the local area.
"If you remove one piece this size you make other areas not viable to farm.
"I think something that covers the agricultural use of that land in the refusal would be really important."
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Committee member Cameron Palin, representing town and parish councils, said: "(The proposal) poses a serious harm to the community and the environment, particularly in relation to flooding, road safety for pedestrians, cyclists and other vulnerable users."
Though supporting a refusal, Cllr Geoff Brodie, representative for Pan and Barton, raised concerns over the availability of affordable housing: "The officer's recommendation I am content with, on environmental grounds in particular, as the reason to refuse this.
"But the majority of this council and this committee don't fully understand that there is a housing crisis for young people on this Island, for people who are earning minimum wage type earnings.
"This is a site that potentially could provide homes for people - I would rather see it entirely social housing - that's my politics."
Tallulah Estates' agent Andrew White said: "The proposal will provide much needed housing in a sustainable and accessible location.
"The village centre is within 750 metres of the site on foot and contains a significant range of the facilities required for everyday living, including a health centre, two pharmacies, two dental surgeries, a sport and community centre and shops and cafes."
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