A council could be taken to court after plans to build homes on a wildlife site it sold to a developer were thrown out.

Developer Whitgift said it would try to recover its costs from Brighton and Hove City Council after a public inquiry rejected the bid to build the houses for a second time.

A planning inspector said it would be premature to develop the greenfield site and the homes would harm wildlife.

The proposal to build at Wilson Avenue, Brighton, had already been rejected at an earlier appeal hearing and unanimously turned down by the council's planning committee.

Whitgift managing director Jim Murphy said applying for planning permission for a residential development had been part of the contract he signed with the council to buy the land.

He said: "You can't invite somebody to spend a lot of money as a council when you are also the planning authority and then don't give permission.

"The contract was extended by the city council to enable us to go to the second appeal against the city council, which I find very bizarre."

The inspector rejected two schemes put forward by Whitgift. One to build 35 homes and a second smaller application to build 30 houses.

Conservationists have been fighting the plans since they were proposed two years ago.

They said the 1.8-acre site was home to 19 nationally-notable species and building there would damage the nearby nature reserve.

The Government's chief wildlife watchdog objected to the plan and the Sussex Archaeological Society said it would intrude on the surroundings of 3,500-year-old Whitehawk Camp.

Dave Bangs, of the Friends of Whitehawk Hill, said: "We are very pleased with the result. Maybe, at last, Whitehawk Hill is getting some of the respect it deserves.

"The community is the victim of the council's poor decision-making and inability to co-ordinate the conservation and development functions."

The council said it was pleased the original planning committee decision had been upheld but did not want to comment on possible legal action.

A public inquiry into new planning guidelines this autumn could still designate the site for housing.