An outline application was submitted earlier this year by Moorlands Holdings (NE) Ltd for a housing, leisure and retail development at Belford Golf Club.
Club owners David and Michael Ratliff wanted to build 37 new homes around the nine-hole course, along with leisure, office and retail facilities which they said would create at least 50 jobs and breathe fresh life into the village.
But the application has been refused under delegated powers by Northumberland County Council planners.
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Michael Ratliff said: “We were very disappointed to receive the decision, more so because we had no indication from the council of their intention that this decision was being made.”
The application had attracted more than 30 objections with concerns about over-development, road safety, loss of wildlife habitat, flooding and the impact on village infrastructure.
Objections were also lodged by Historic England and The Gardens Trust about the impact on the the Grade I listed Belford Hall.
But there were also 17 letters of support welcoming the proposed new retail and leisure offer.
Mr Ratliff said: "We were fully aware of the issues raised by consultees but were actively engaged with specialists in the relevant matters who were in the process, and still are, of providing the additional information required, with a view to resolving the issues. The council case officer was fully aware of this.
"We are shocked at various aspects of the decision having received a very positive response to our pre-application enquiry from a senior council planner.
“We requested and expected a full determination by the planning committee in an open forum and find the failure of the council to engage with us troubling.
"Legal advice has been taken and the process is now subject to a formal complaint and requests under the Freedom of Information Act have been initiated as we seek full transparency as to the process by which the council has come to this decision.
“We believe the local area of Belford, which once had 17 retail shops and pubs, would greatly benefit from the scheme, particularly as it now only has one small retail store. Our proposal would provide another larger retail store offering local residents greater choice and value.
“The other aspects, incorporating leisure facilities and smaller independent commercial units, would provide much needed opportunities in the village.
“We are currently in dialogue with the council as to why such a decision was made without prior notice to us, and are happy to work with them to resolve this matter.”
The scheme had proposed 37 homes, 11 within a walled garden and 12 detached properties and 14 bungalows on and around the driving range.
Also included were a supermarket/farm shop, retail units, a football/multi sports pitch, two tennis courts, an extended clubhouse, driving range, bowling green, play park, micro-brewery and holiday lodges.
James Bellis, senior planning officer, stated: ‘The proposed development, by virtue of its potential impact on the local landscape, historic environment and natural beauty of the local area, would result in a form of development at odds with the character and appearance of the immediate surrounding area.’
He stated insufficient information was supplied on ecological, archaeological and flooding matters and the issue of affordable housing had not been resolved.