More than 180 homes were granted outline planning permission on a proposed new estate in Hove.
They are expected to be built alongside a further 880 homes in Toads Hole Valley, off King George VI Avenue, known locally as Snakey Hill.
The original scheme was approved in principle in May last year and included a secondary school at the foot of the hill, south of the A27 Brighton bypass.
But falling pupil numbers mean that the school is no longer required, with the birth rate having fallen by 900 a year from 2008 to 2019.
Brighton and Hove City Council’s planning committee was told that no extra school provision was expected to be needed in the area for 20 years.
The revised plans were submitted by a consortium made up of Toads Hole Valley Limited, Pecla Investments Limited and Robert Simon.
They failed to win over Independent councillor Tony Janio who represents Hangleton and Knoll ward.
Cllr Janio said that he had attended many community meetings in his ward about the scheme – and people were expecting community space.
He said that the high-density housing in West Blatchington, just west of the site, needed the community facilities that they expected to share with the previously approved school.
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Cllr Janio said: “Hold your nerve. Refuse it tonight. They will come back with a better offer. This is one of the last prime bits of land on this side of the A27.
“The whole point of a community is to have things where people are proud to live and this tips the balance for me. I can’t support it.”
Conservative councillor Carol Theobald also voted against the application, saying that too many homes were planned for the site.
Green councillor Sue Shanks abstained from voting after saying: “I am concerned that this is an opportunity for the developer to make more money without providing more community facilities which a school would have been.
“I see where they’re going with the school but these things can be quite difficult to predict. We have expanded a lot of schools. Now we’re reducing the numbers. I thought the idea was for a through school. These children are going to have to travel outside that site.”
Labour councillor Clare Moonan said: “It’s disappointing that we don’t have the opportunity to look at other uses for this site – but this is the application.”
With suggestions that the King Alfred’s outdated leisure facilities be replaced off-site so that the seafront plot could be used for housing, some regarded Toads Hole Valley as an option.
Cllr Moonan said: “Housing is much needed and we don’t often have such big sites to have a master plan like this.”
She also urged the applicant to make good any loss of biodiversity on the site, with habitats such as grassland, mixed scrub and broadleaved woodland expected to go.
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