A packed room of protesters celebrated as "nightmare" plans to build 90 homes on downland were rejected.
More than 40 people clapped and cheered in Worthing Town Hall when borough planners refused Hargreaves Residential Developments' move to build on fields at the end of Beeches Avenue in Worthing.
But the firm has now appealed to the Government to try and get its application approved and an inquiry looks set to be held.
Protesters felt the houses would cause traffic chaos on the already congested A27 Upper Brighton Road and ruin a scenic, grassy area backing onto the Sussex Downs.
Almost 400 people had sent letters to Worthing Borough Council objecting to the development and the Highways Agency, which had initially made no objection to the application, agreed it would increase congestion on the A27.
At yesterday's planning meeting (April 29), deputy planning chairman James Doyle said: "No-one sees these houses as an option for the area.
"Given the site is only just along from Lyons Farm, and we can see what a mess the Highways Agency made of the junction there, to add 90 homes would make a bad situation into a nightmare."
Hargreaves had argued more houses were needed to meet Government targets.
But the Beeches Action Group (BAG), opposing the developers, felt they had an ace up their sleeves after the town's planning committee chairman Bob Clare said Worthing was already exceeding Government housing targets.
Mr Clare said: "The argument for more houses has fallen. It looks, from the impending county structure review, that Worthing has designated 350 houses too many.
"Even losing 90 homes still on Hargreaves' application will be made during a Government planning inquiry, the committee unanimously rejected the plans due to the impact they would have on the countryside, the loss of agricultural land and the traffic problems they would cause.
Planners also thought it was premature to make a decision on the land at Beeches Avenue until the South Downs National Park boundary was finalised.
Worthing Borough Council has proposed that the land is included within the perimeter of the park.
Mr Clare said: "Thanks to the public for all the hard work. We will be relying on you at the inquiry."
He added: "Check with the town hall when the planning inquiry will be and please turn up mob-handed."
After the meeting, BAG co-founder Karl Heryet said: "Worthing has a surplus of 260 homes - the need for housing argument has gone out of the window.
"We'll have an emergency meeting to organise the troops to add weight against the appeal.
Mr Heryet said: "There is no justification for these buildings at all."
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