Campaigners who fought to stop houses being built on a greenfield site were jubilant when the scheme was rejected.But one year on, their jubilation has turned sour.

They will have to tangle with the planning system all over again at a rerun of the public inquiry, at which the developer they thought they had fought off has every chance of success.

The Brighton and Hove City Council-owned site high up on Wilson Avenue is typical of the dozens coveted, for different reasons, by conservationists and developers.

The 1.8 acres of bushes and brambles sandwiched between the Downs and the urban area in east Brighton is home to colonies of scarce great green bush crickets, common lizards and rare birds, including the lesser whitethroat and Dartford warbler.

Some on the council were eager to preserve the site as a nature reserve. Others wanted to sell off the land for housing.

A deal was struck with London-based Whitgift to build 35 homes. The council went so far as exchanging contracts, with completion dependant on the developer winning planning permission.

Campaigners demonstrated outside Hove Town Hall when the application went before council planners in July 2000. More room had to be found inside because so many wanted to listen to the committee's deliberations.

English Nature, the Government's chief wildlife watchdog objected, saying the proposal would damage the neighbouring Whitehawk Hill nature reserve.

The Sussex Archaeological Society said building high on the Downs would intrude on the surroundings of the 3,500-year-old Whitehawk Camp.

The application was rejected unanimously.

Labour councillor Kevin Allen said at the time: "The environmental case for protecting this site is overwhelming.

"I would like to pay tribute to the vigilance and commitment of residents and organisations, such as the Friends of Whitehawk Hill."

Campaigners remained vigilant when Whitgift appealed and at the subsequent public inquiry, which took place in January 2001.

Their hard work seemed to have paid off when the inspector threw out the appeal, although his comments sowed the seeds for what was to come.

In his report, he said the site was not of great nature conservation importance and there was an urgent need for low-cost homes in the area.

He also criticised the council for its divisions, saying: "I can understand the bewilderment of local people when they have the council on the one hand seeking to protect the nature conservation interest of the site while another part of the same council is seeking to sell the land for housing."

The report was full of contradictory signals, which allowed Whitgift to challenge the decision in the courts.

Unknown to anybody outside the hermetically-sealed planning world, the Planning Inspectorate, the body charged with policing the system, decided it would probably lose and did not defend the case.

Now the campaigners have been told they will have to fight a public inquiry all over again.

Steve Cole, who chairs the Friends of Whitehawk Hill, the group at the forefront of the campaign to stop the homes, said: "We thought that was it. The people did not want it and the council did not want it.

"Without us there it would have just gone through on the nod.

The planning process is not people friendly at all - it is more in the developer's hands."

Fellow campaigner Peter Leigh said: "They have allowed this one to slip through and let the developer make the most of it."

The Planning Inspectorate said: "The department accepted the decision should be quashed and the appeal sent back for redetermination.

"The fresh appeal is now under way and obviously we cannot say anything which might affect the proceedings."

Whitgift said it intended to build slightly fewer houses at the site if the new appeal found in its favour, with about eight low-cost homes and more areas set aside for wildlife.

But campaigners point to another formerly council-owned site, the old Marine Drive Children's Home in Rottingdean, where Whitgift won permission for 22 luxury flats.

The council backed away from insisting some of those should be low-cost homes, fearing the developer would win any appeal. Instead, eight low-cost homes will be built eight miles away in Portslade.

Any homes built at Wilson Avenue would likewise be predominantly commercial, claims Mr Cole.

He said: "I think it would be a tragedy if any building goes on on the site because it would be for private gain. It would not be social housing at all."

Whitgift managing director Jim Murphy said he would sue the council to recover costs if his company was defeated at the fresh inquiry.

He said: "All we are doing is what we are contracted to do. Our contract said we had to put in a planning application and that is what we did."

Back at the council, where the saga and its contradictions and confusions began, fingers are crossed the new inspector will decide against building and officials are looking again at whether the site should ever be developed.

Roy Pennington, who chairs the planning committee, said: "I look forward to a fresh decision from the planning inspector, which should finally remove the uncertainty."