SOUTHAMPTON port bosses are saddled with a 500-acre site that is virtually worthless after losing the Battle of Dibden Bay.

The government's decision to reject plans for a £600m port has left Associated British Ports struggling to find a use for the land.

Other waterfront sites in the Southampton area have been snapped up by developers and used to provide luxury homes.

However, plans to build houses at Dibden Bay were rejected in the 1980s - and any similar application in the future is also likely to be refused.

The environmentally sensitive area is part of the strategic gap between Hythe and Marchwood.

It is safeguarded by a raft of wildlife laws and is also part of the proposed New Forest National Park, which aims to give the area extra protection.

Experts say Dibden Bay is likely to remain rough grazing land - just as it has been for the past 50 years.

The site was born in the 1940s, when work started on a massive reclamation scheme. In 1967 it was bought by ABP's predecessor, the British Transport Docks Board, and earmarked for future port use.

Twenty years later, ABP produced plans to use it for housing, industry and a marina. The scheme was thrown out and in 1994 port bosses announced that they intended to build a container terminal.

Now the controversial scheme is in ruins following this week's statement by transport minister Tony McNulty, who rejected the proposed port on environmental grounds.

New Forest District Council is hoping the announcement marks the end of attempts to redevelop the site.

Chris Elliott, head of the authority's development control unit, said: "The land is part of the strategic gap between Hythe and Marchwood. It's also covered by nature conservation designations and ought to stay as rough grazing land.

"Housing would be totally unacceptable, just as it was in the 1980s when ABP wanted to build 1,000 homes.

"The company said Dibden Bay was redundant to their operational requirements and should be allocated for residential development in the Hampshire county structure plan.

"The county council, with our support, said housing at Dibden Bay would be inappropriate. It was only then that the port proposal emerged."

Paul Vickers, head of Residents Against Dibden Bay Port, wants the site to be given even more protection.

"ABP say they won't challenge the government's decision, but who knows what might happen in ten or 20 years' time?" he said.