Kincardine and Mearns councillors have voted down proposals for 121 new homes at Newtonhill.
Barratt North Scotland wanted to create the properties to the south of the village featuring a blend of cottage flats, semi-detached, terraced and detached properties.
But the proposals for the new housing development attracted more than 650 objections.
During a presentation to councillors last month, objectors claimed that the plans would turn the community into a “zombie suburb”.
Having deferred a decision to gain more information on local school capacity, traffic arrangements and associated infrastructure within the area, Kincardine and Mearns Area Committee spent nearly two hours on Tuesday debating the application.
Councillor Ian Mollison argued that the plans would create too many houses on the site and that there would be an impact on education rolls, particularly at Portlethen Academy which would reach capacity as a result of the development in 2023.
His motion for refusal was seconded by Councillor Colin Pike and received eight votes, including those of all four local members, with the amendment that the proposal be approved attracting two.
In a statement following the meeting, David Palmer, managing director for Barratt North Scotland, said: “Naturally we are disappointed with the decision to refuse our application to deliver new homes for Newtonhill.
“Our proposal for the site, which is allocated in the Local Development Plan and which also conforms to the Masterplan approved by the same committee earlier this year, has received widespread support from the planning authority, as well as other services within the council.
“We strongly believe that our proposal will benefit the area by providing much needed quality homes for sale and affordable rent, delivered as part of the existing local development plan vision.
“Clearly, we need to consider our options following today’s decision including the possibility of appeal.”
Last month, Michael Morgan, chairman of Newtonhill, Muchalls and Cammachmore Community Council, said the plans were a “significant departure” from the Local Development Plan and should be refused.
He said: “The Local Development Plan allocates 70 houses for OP1, but the developer has excluded the paddock which gives an allocated of 51 for this application.
“This elevated density of housing is a significant departure from the Local Development Plan that is not justified.”
Community council vice-chair Alison Daniels claimed there was no “strategic need, market or desire” for the development.
The Muchalls resident told councillors: “This application adds nothing to our comunity but an extra burden on our schools, on childcare, after-school provision, medical facilities and the road system.
“The developers are not part of the community – they neither know nor care.
“This application has gathered an almost unprecedented strength of objection. We are a real community. We know our neighbours. We are engaged. Do not turn us into a zombie suburb.”