Hopes for a new village hall and cricket pavilion at Easton, near Winchester, have been dealt a bodyblow by city planners.
Residents had been intending to fund the £500,000 project in Chapel Lane by building two new homes on part of the hall car park and selling them.
But members of the city council's planning committee turned the scheme down on the basis that it was against policy and would set a precedent.
The scheme was supported by Itchen Valley Parish Council and the Upper Itchen Valley Society with 59 residents writing to back the application and 22 opposing it.
Planners said there were no special circumstances to justify development on land designated as countryside and they added that the access in Chapel Lane would be dangerous and the development would encourage parking on the road.
Chairman of the village hall committee, Robert Hall, said the villagers would be considering appealing against the decision.
Meanwhile, he said, the hall was due to close soon because of its deteriorating condition.
"It might have another 18 months to two years," he said.
"It was built in the 1970s and was never designed to go on a long time. The roof leaks. It is reaching the end."
The decision presents a dilemma for Easton and Martyr Worthy Cricket Club.
Its status as a Southern Premier League club is under threat unless it can improve its facilities and the planners' verdict on the scheme has angered chairman, Roy Paramor.
"They're frightened of their own shadows," he said.
"We need a new pavilion because, ultimately, the club will lose accreditation, be relegated, lose its players and fold.
"At the moment, the planners are working against us. They don't have the community or young people at heart. We are the only organisation helping to look after young players in the Itchen Valley."
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