IT was hailed as a golden opportunity to transform a waterfront site in Lymington. The closure of the Webb's chicken factory was a terrible blow to the town's economy, but presented civic leaders with a once-in-a-lifetime opportunity.

They were quick to see the potential of the seven-acre site overlooking a picturesque part of the Lymington River.

Council officers issued a set of planning guidelines and looked forward to the day when ugly industrial buildings were replaced by a landmark development.

But the dream has turned into a nightmare.

Multi-million-pound plans to build a hotel and more than 300 homes on the site have been thrown out after attracting an avalanche of objections.

Almost every aspect of the scheme came under fire at a meeting of the district planning and development control committee.

Objectors included the Lymington Society, whose members were clearly disappointed with the content of the application and complained that it lacked the "wow factor".

Now the applicant must go back to the drawing board and submit a revised scheme or lodge an appeal with the government's planning inspectorate, which has the power to overturn the council's decision.

An appeal would almost certainly result in a public inquiry, given the size of the application and the sensitive nature of the site. The land has stood idle for three years and now looks set to remain a blot on the landscape for some time to come.

But the potential delay is unlikely to upset Lymington residents, who claim that the site's future is too important to be decided in haste.

The Webbs story began in December 2000, when the processing plant was bought by the Faccenda Group.

A month later, Faccenda dropped a bombshell by announcing that the factory was too old and would have to close, with the loss of 500 jobs.

It was a bitter blow to the staff, some of whom had worked at the plant for many years.

Business leaders feared an economic catastrophe and New Forest West MP Desmond Swayne summed up the views of many when he said: "Losing 500 jobs in a relatively small community is quite a blow."

As employees started to look for other work, attention turned to the future of the site.

Simon Hayes, then leader of New Forest District Council said: "We all agree that it's an enormous opportunity and we all want to achieve something special for Lymington."

Eighteen months ago, a report presented to the council's ruling Cabinet said potential uses of the land included a hotel and a restaurant.

Earlier this year, Paxton Holdings submitted a planning application that mirrored many of the council's hopes, but also featured more than 300 homes.

Reaction to the content of the application was swift and damning.

Campaigners claimed the scheme contained too much housing and criticised the lack of shops, cafes and bars needed to attract visitors to the town.

The Lymington Society decided to hold a public meeting at which people could quiz Paxton about the plans.

Many of the residents arriving at the meeting looked shocked when they saw a model that revealed the size and scale of the proposed development.

One woman said: "It's another Ocean Village - fine for Southampton but totally wrong for somewhere such as Lymington."

The scheme was subjected to another barrage of criticism when it went before the planning committee meeting on June 9.

Council officers criticised the absence of a suitable access, the lack of flood defence works and a shortage of employment provision on the site.

Lymington councillor Kevin Ault said: "The redevelopment of this site has been described as an opportunity of a lifetime that is unlikely ever to be repeated.

"But there is nothing to commend this scheme. Virtually no aspect of it is acceptable."